EU and US call a truce, postpone steel tariff showdown until after elections

The European Union (EU) and the US have decided to prolong their ceasefire on steel and aluminium imports, averting the looming threat of tariffs impacting transatlantic trade.  

According to Bloomberg, the European Commission, the executive arm of the EU, revealed on Tuesday that retaliatory measures, initiated during the Trump era, will be put on hold for 15 months until March 31, 2025, providing a temporary respite in the steel tariff war. 

While Brussels succeeded in extending the truce, negotiations failed to secure an improvement in the current tariff-rate quotas (TRQs) set by the US. The extension is anticipated to save EU steel and aluminium exporters around €1.5 billion ($1.6 billion) in annual tariffs. The EU, dissatisfied with the existing quota system, advocated for more flexibility, pushing for modifications such as annual quotas for the European market. 

Expressing commitment, the EU asserted that it will continue engaging with the US to protect its legal rights and eliminate US 232 tariffs on EU exports permanently. The reference to Section 232 of US law highlights the authority granted to the president to impose duties on imports for national security reasons. 

This development coincides with the ticking clock on the Global Arrangement on Sustainable Steel and Aluminium (GSA), poised to maintain tariff exemptions until after the upcoming US presidential election in November 2024. The GSA agreement holds the promise of a permanent resolution to the trade dispute sparked by Trump-era tariffs, with the EU insisting on lifting all tariff-rate quotas, a demand resisted by the US. 

As the EU mulls its options, including a potential case at the World Trade Organisation or re-imposing tariffs, challenges loom large. Concerns among EU member states about escalating trade tensions in the lead-up to the election in 2024 cast a shadow over the prospect of decisive action. 

Source:WION News