EU extends tariff suspension in US steel dispute

BRUSSELS — The European Union on Tuesday extended the suspension of its rebalancing tariffs on products from the United States in the context of the steel and aluminum dispute until March 31, 2025.

Initially implemented during Donald Trump's presidency, the EU rebalancing tariffs were a response to the US Section 232 tariffs on steel and aluminum.

The extension comes in response to the US extending its own suspension of tariffs for historical trade volumes reflected in the Tariff-Rate Quota system.

The extension should save EU steel and aluminum exporters approximately 1.5 billion euros ($1.64 billion) in tariffs annually.

"The extension provides us with the necessary space to continue pursuing the full and permanent removal of 232 tariffs on EU exports, as well as working on addressing global overcapacity and decarbonization of steel and aluminum industries," Valdis Dombrovskis, executive vice-president of the European Commission and European commissioner for trade, said.

US Trade Representative Katherine Tai said in a separate statement that current talks are "technically complex".

The goal, she said, is to come up with an arrangement allowing both sides to incentivize "fair and clean production" in the sectors.

"The United States remains committed to our partnership with the EU and to staying at the table to continue the progress we have made so far," Tai said.

Protectionist policies

Trump had slapped high tariffs on steel and aluminum coming from many countries, sweeping up EU exports in the process.

Trump's successor, Joe Biden, who also seeks to protect US industry, kept the tariffs in place but granted suspensions for EU exporters, Agence France-Presse reported.

The United States faces elections next year, and some of its states with high steel output are swing states that could help decide the outcome.

The EU also faces bloc-wide elections next year that will usher in a new European Commission.

Dombrovskis said Brussels is "committed to ensuring that trans-Atlantic trade in steel and aluminum is undistorted and that our exporters are treated fairly".

The US and the EU have been at odds on steel and aluminum exports since 2018 when the US introduced tariffs on 6.4 billion euros worth of European steel and aluminum exports.

In retaliation, the EU introduced its rebalancing tariffs on US exports to the EU of a value of 2.8 billion euros.

Last year, the EU decided to suspend its rebalancing tariffs until Dec 31, 2023. The US replaced its Section 232 tariffs with a tariff-based system quota based on historical trade volume, with above-quota imports still subjected to tariffs.

Agencies - Xinhua