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The EU has agreed to set aside plans to increase tariffs on a range of US products, as the two sides seek a resolution for a long-term clash over the steel and aluminum sectors.
Brussels said in a joint statement with the Biden administration that the EU and the US had agreed to avoid changes that would “negatively affect bilateral trade” while opening talks to address global overcapacity in the two sectors.
The move means the EU will stop moving forward with a projected increase in tariffs for a range of US products that was slated for early next month. The two sides have until the end of the year engaged in discussions about the oversupply of steel resulting from production in countries such as China.
The EU measure is linked to a dispute that has taken place since 2018, when former President Donald Trump imposed duties on aluminum and steel in Europe and other economies, saying the measures were necessary for reasons of national security.
The EU retaliated with its own tariffs for a range of products, which it was preparing to push on 1 June. In its first round, the EU achieved well-known American products, such as bourbon, clothing and motorcycles.
The move comes ahead of Monday’s summit between the EU and US President Joe Biden next month, which will aim to improve transatlantic relations after the tumult of the Trump years. Valdis Dombrovskis, executive vice-president of the European Commission, said the decision to suspend the automatic increase in retaliatory tariffs showed that the EU was taking steps to “restart the transatlantic relationship”.
He announced the truce on Monday in a joint statement with U.S. Trade Representative Katherine Tai and Commerce Secretary Gina Raimondo.
The two sides said they had agreed to discuss “overcapacity in steel and aluminum and the deployment of effective solutions, including appropriate trade measures, to preserve our critical industries,” the statement said.
“To ensure the most constructive environment for these joint efforts, they agreed to avoid changes on these issues that negatively affect bilateral trade.”
Dombrovskis added: “By suspending our measures, we are creating the space to resolve these issues before the end of the year.
“The EU is not a threat to national security for the United States. But the distortions created by global overcapacity, driven mainly by third parties, pose a serious threat to the market-oriented steel and aluminum industries and the EU and workers in those industries. “
Earlier this month Dombrovskis he said The Financial Times was also increasingly hoping to reach an agreement with the Biden administration to end a 16-year dispute over subsidies to Airbus and Boeing.
The EU and the United States have pledged “very intensely” to resolve their trade disputes, he said, while hailing a “very welcome change” since the Biden administration took office in January.
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