Bloomberg — The U.S. is close to a trade agreement with the European Union on steel and aluminium that will permit the allies of each other to eliminate tariffs on their more than $10 billion annual exports.
According to sources familiar with negotiations, negotiators appear to be on track to come to an agreement over the weekend.
Transatlantic partners are racing for a deal to be reached before December 1, when European tariffs will double.
This dispute started when Donald Trump, the former U.S. President, introduced duties on steel from Europe, Asia, and other countries, due to threats to national security. The EU subsequently retaliated, targeting products including Harley-Davidson Inc. motorcycles, Levi Strauss & Co. jeans and bourbon whiskey.
A message left with the European Commission wasn’t immediately returned. The U.S. Trade Representative’s office declined to immediately comment. The Commerce Department’s press office didn’t immediately respond to requests, all of which were made out of regular business hours.
Officials say that the U.S. and EU have been discussing so-called tariff-rate quotes. These allow certain quantities of products to be exported to countries at lower duty rates but subject shipments exceeding a threshold to higher tariffs.
The final details of an agreement have been hard to come to an understanding. Both sides will need to accept it once they are done, as per one person.
This significant move towards getting rid of metals tariffs represents a significant rapprochement among the allies. The relationship was strained even after President Joe Biden assumed office in January with the promise to restore relations.
EU tried to negotiate a deal which would restore historical steel and aluminum trade before tariffs were imposed. However, any agreement must be compatible with World Trade Organization rules.
According to a source familiar with an earlier proposal, the Biden administration offered significant duty-free access for the EU during the negotiations. This would have the effect of protecting the U.S. marketplace from global distortions and benefiting EU producers as well as their bottom line.
Trump placed a 25 percent duty on imported steel and a 10% tax on aluminum shipments from inward bound shipments to China and the EU. This was done under section 232 of 1962 Trade Expansion Act. It was intended that Trump would label competition for the metals as a national security threat. In the event that imports are deemed to be a national security threat, Congress can levy without voting.
Brussels responded by setting tariffs against iconic American brands within key Republican constituencies. Paul Ryan, then-Republican speaker of the House of Representatives, comes from the same state — Wisconsin — where Harley-Davidson is based. Bourbon whiskey hails from then-Senate Majority Leader Mitch McConnell’s home state of Kentucky.
–With assistance from Bryce Baschuk and Jenny Leonard.