The U.S. and the European Union have concluded a trade truce on steel and aluminum that will allow the allies to remove tariffs on more than $10 billion of their exports each year.
Negotiators reached an agreement Saturday as they worked to balance market demands and climate change, said National Security Adviser Jake Sullivan, speaking on the sidelines of a Group of 20 summit in Rome.
“The agreement, ultimately, to negotiate a carbon-based arrangement on steel and aluminum trade addresses both Chinese over production and carbon intensity in the steel and aluminum sector,” Sullivan told reporters Saturday. Negotiators were working hard to reach a deal before Dec. 1, when the European tariffs are set to double.
The deal marks a significant moment in repairing the U.S. trade relationship with Europe after Donald Trump’s disruptive presidency.
“We’ve reached an agreement with the EU which maintains the 232 tariffs, but allows limited volumes of EU steel and aluminum to enter the U.S. tariff-free,” said U.S. Commerce Secretary Gina Raimondo.
“It was a very successful negotiation and we agreed on a way forward for how to face our shared challenge which is global excess capacity mainly by China,” she said.
Raimondo said the deal would help address supply-chain issues that have been hurting U.S. businesses.
“We are also experiencing unprecedented supply-chain disruption and we fully expect this agreement will provide relief in the supply chain and drive down cost increases as we lift the 25% tariffs and increase volume,” she said.
U.S. officials said that the deal involves so-called tariff-rate quotas, which allow countries to export specified quantities of a product to other nations at lower duty rates, but subjects shipments above a predetermined threshold to higher tariffs.
The dispute started in 2018, when Trump imposed duties on steel and aluminum from Europe, Asia and elsewhere, citing risks to national security. The EU subsequently retaliated, targeting products including Harley-Davidson Inc. motorcycles, Levi Strauss & Co. jeans and bourbon whiskey.