[Asia Economy Reporter Byunghee Park] The United States is expected to soon announce that it will no longer raise tariffs on steel and aluminum imported from the European Union (EU). This move aims to resolve the tariff dispute with the EU that was triggered during former President Donald Trump's administration.
Bloomberg News, citing sources, reported that the U.S. could announce its position as early as the 17th (local time). Accordingly, the EU is also expected to temporarily suspend the planned tariff increase on U.S. products scheduled to take effect from June 1. Currently, the EU plans to raise tariffs on U.S. products to 50%, double the current rate, starting June 1.
The U.S. and the EU have agreed not to raise tariffs beyond the current levels and are expected to continue discussions aimed at completely eliminating tariffs in the future. Earlier, the EU proposed a six-month suspension of all tariff impositions by both sides.
The tariff dispute between the U.S. and the EU began during former President Donald Trump's administration. In March 2018, the Trump administration imposed tariffs of 25% on steel and 10% on aluminum produced in the EU, citing national security reasons, which sparked the dispute. At that time, the U.S. engaged in tariff disputes not only with the EU but also with Canada, South Korea, China, Japan, and others worldwide. The EU retaliated by imposing tariffs on Harley-Davidson motorcycles, Levi's jeans, bourbon whiskey, and other products.
With the inauguration of the Joe Biden administration earlier this year, the tariff war between the two sides entered a new phase. The Biden administration prefers cooperation with the EU over confrontation. There are voices emphasizing the need to cooperate with the EU to counter China.
An EU Commission spokesperson stated on the 15th that they would cooperate with the U.S. to resolve the excessive tariffs imposed on steel and aluminum and to address the global steel overproduction issue. The spokesperson said that the U.S. and the EU are ultimately working to eliminate tariffs but are not yet ready to do so.
The U.S. Chamber of Commerce also issued a statement on the 14th, saying that the tariff dispute has placed a tremendous burden on American companies and workers. John Murphy, Senior Vice President for International Policy at the U.S. Chamber of Commerce, said, "U.S. exports of alcoholic beverages to the EU have dropped by nearly 40% since the tariff dispute."
Meanwhile, Katherine Tai, U.S. Trade Representative (USTR), defended the tariffs imposed by former President Trump during a Senate Finance Committee hearing on the 12th. Tai stated that the tariffs were necessary to address the steel overproduction problem primarily caused by China.
Regarding this, Murphy argued that the goal of curbing Chinese steel imports has been achieved through other measures such as anti-dumping tariffs. He noted that Chinese steel accounts for less than 1% of U.S. steel consumption.
As the U.S. and the EU suspend tariff increases, they are expected to continue dialogue to resolve the steel overproduction issue. With consensus forming between the two sides, the upcoming U.S.-EU summit scheduled for next month in Brussels, Belgium, could mark a turning point. The White House announced that President Joe Biden and the EU delegation will discuss cooperation in the trade sector.
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