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The frozen trade dispute over steel has become an early test for the EU’s relationship with the incoming Trump administration, with a senior U.S. official saying Brussels should consider delaying a March plan to impose billions of dollars of additional tariffs on U.S. imports.
President Joe Biden has reached a truce with the EU amid a conflict sparked by Donald Trump’s imposition of tariffs on steel and aluminum in 2018, but both sides plan to reimpose tariffs on the EU from the end of March next year. In the United States, the end of 2025.
“The Commission really has to make a choice,” said Rufino Hurtado, U.S. trade representative to the EU. “March 2025 is not long after his inauguration,” he said.
“It is entirely up to the EU to decide what happens in 2025 with respect to these retaliatory tariffs – whether to extend them again or allow them to be rolled back,” he said.
After being re-elected, Trump threatened to impose tariffs of 10 to 20 percent on all EU imports and attacked the EU for selling more to the United States than it buys from the United States.
Under the Biden negotiations, the United States replaced the 25% tariff on steel and 10% on aluminum in 2018 with a quota system, and the EU suspended retaliatory tariffs on American products.
Hurtado told a meeting in Brussels that the EU and the United States were “closer than ever” on most issues, but that Brussels had stalled progress in talks over the past three years. With the dispute settled, the two agreed to found the ‘Green Steel Club’ in 2021.
The idea was to agree on environmental standards to prevent cheap Chinese metals made from fossil fuels flooding US and EU markets.
Hurtado said the United States had put forward an “ambitious” proposal but “it is not consistent with EU goals.”
EU trade commissioner Valdis Dombrovskis said the proposed Agreement on Sustainable Steel and Aluminum (GSA) must comply with multilateral trade rules, while EU officials said the US plan to favor domestic producers would probably violate WTO rules. said.
Brussels wants to establish a green steel club based on its own Carbon Border Adjustment Mechanism (CBAM), which would impose tariffs on imports based on their carbon emissions from 2026. This will also impact U.S. steel, as the U.S. does not have national carbon pricing. system.
Meanwhile, EU producers are still paying about $300 million a year for metal exports in excess of U.S. quotas introduced to resolve the deadlock.
The EU plans to reimpose tariffs on €4.8 billion of US imports from March 31, including 50% on bourbon whiskey, Harley-Davidson motorcycles and motorboats, unless there is a further delay.
The low levy applies to a wide range of goods including crockery, batteries, bins, napkins and more.
“We aim to find a solution to this problem,” said an EU official who declined to be named. “But the situation is unbalanced because our exporters are still paying some tariffs. “I want to resolve it for the benefit of both parties,” he said.
The committee declined to comment.
