EU seeks to eliminate the imbalance in steel trade with the US

The EU is discussing the possibility of temporarily extending the truce with the US over steel and aluminum trade. Such a prospect would bypass the stalled talks and avoid the return of tariffs on $10 billion worth of transatlantic exports, Bloomberg reports.

Extending mutual trade concessions would give more time for a final settlement before the US presidential election in 2024, according to sources familiar with the views of European officials.

Negotiations on the steel agreement (Global Sustainable Steel and Aluminum Agreement, GSA) are aimed, among other things, at resolving the dispute over Section 232 tariffs on European metal imports, to which the EU has responded with its own measures. The parties reached a temporary truce in 2021, which expires at the end of this year.

As part of the temporary arrangements reached two years ago, the US introduced tariff quotas (TRQs) for European steel and aluminum, while the EU froze its restrictive measures against American products. As stated earlier, this created an imbalanced situation in favor of the United States.

The severity of tariff quotas, Bloomberg notes, has led to the fact that a significant portion of European steel continues to be subject to duties, and the continent’s exporters are burdened with bureaucratic red tape. Redressing this imbalance is now part of the EU’s ongoing discussions with the Biden administration, one source said. If the asymmetry is not corrected, the EU will face a choice: reintroduce tariffs on American goods or maintain the status quo and thus make concessions to the United States.

The GSA’s goal is to combat global overcapacity and carbon emissions in metal production. Some progress has been made on the first of these two goals, and the agreement will also be open to like-minded countries. However, the negotiations have not progressed much after the EU and the US failed to reach a deal at a summit in October.

The EU insists that the US provide a clear path to the elimination of tariffs and tariff quotas, or at least a relaxation of TRQs, and this remains one of the key obstacles to an agreement.

As GMK Center reported earlier, the European Commission strives to achieve the steel agreement with the USA by the end of 2023 in order to finally resolve the issue with the American import tariffs on steel and aluminum, said the Vice President of the EC, Vira Jourova. Earlier, US Ambassador to the EU Mark Gitenstein said that the United States will continue suspending Section 232 tariffs on European metal if the parties need additional time to reach a steel deal.