The US-EU War Over Steel Tariffs Finally Comes to an End

Written by Associate Editor: Andrea Rojas

In 2018, former President Donald Trump placed a 25% tariff on steel and a 10% tariff on aluminum imported to the United States from any country in the European Union. The tariff resulted in the EU placing duties on American goods imported to the EU. Under the new agreement, the Trump-era tariff will remain in place but allows for “limited volumes” of EU-produced metals to be imported to the U.S. under a duty-free agreement. In a joint statement at the G20 summit, President Biden and European Commission head Ursula von der Leyen shared the agreement’s details. It emphasized restoring the transatlantic relationship between the EU and the U.S. In addition, the two leaders pledged open lines of communication, a mutually beneficial economic agreement, and a joint effort to curb carbon emissions.

The agreement guarantees that the imported steel and aluminum brought into the U.S. is entirely produced within the European Union. The deal will also reduce the amount of “dirty steel” produced in China and thus contribute to the ongoing efforts being made to curb carbon emissions. Such so-called “dirty steel” is steel that produces high carbon emissions and is made in China. In addition, by joining forces, the EU and U.S. can focus their efforts on stopping China’s cheap steel from continuing to flood the market. Suspension of the tariffs will last for two years while the EU and U.S. work on a global accord to end “tariff regimes”.

 There are a couple of critical domestic and international players who are unhappy with this. On an international scale, the United Kingdom is a prominent figure left out of this agreement since it no longer forms a part of the EU The U.S. is the second-largest market for U.K.-produced steel, which will continue to face the Trump-era tariffs unless an agreement is reached. The deal will put U.K. producers at a disadvantage now that the EU producers will export their products to the U.S. without paying the tariff. The U.K. spokesperson has released a statement to say the U.K. welcomes talks with the Biden administration to address the joint efforts of damaging tariffs, steel over-supply, and decarbonization.

In May, the United Steelworkers Union and other unions and industry trade groups urged President Biden to maintain the current tariff imposed by former President Trump. In the letter, they argued that there was already a steel overcapacity in the world and that retaining the tariffs would protect the U.S. industry and the millions of jobs it supports. The deal will likely cause some turmoil and backlash once the President returns home.

Sources:

Aljazeera – US, EU agree on steel tariffs to help on climate change – Oct. 31, 2021, available at https://www.aljazeera.com/news/2021/10/31/us-eu-agree-on-steel-tariffs-to-help-on-climate-change

Bloomberg – U.S., EU Eye Global Coalition to Fix Steel, Aluminum Markets – Oct. 31, 2021, available at https://www.bloomberg.com/news/articles/2021-10-31/u-s-eu-eye-global-coalition-to-fix-steel-aluminum-markets?srnd=premium

Forbes – U.S. Strikes Deal With EU To Relax Trump-Era Steel And Aluminum Tariffs – Oct 31,2021, available at https://www.forbes.com/sites/kimberleespeakman/2021/10/30/us-makes-deal-to-relax-trump-era-steel-and-aluminum-tariffs-on-eu/?sh=112c8c47a74e

BBC – UK steel makers ‘left behind’ as US ends trade war – Oct 31,2021, available at https://www.bbc.com/news/business-59113868