U.S. President Biden to Ease Metal Tariffs on the European Union
Posted on 10/30/2021
The United States and the European Union on announced an easing of a trade dispute that started during the Trump administration. Donald Trump’s administration imposed a 25% tariff on European steel and another 10% tariff on aluminum in June 2018 on the grounds of national security. The European Union contested the tariffs and took the case to the World Trade Organization and imposed retaliatory measures on up to 6.4 billion euros of U.S. exports. The EU targeted products such as Bourbon whiskey, peanut butter, and orange juice.
Reversing Trump’s America First Trade Policies
U.S. President Biden plans to ease the tariffs on the EU. Biden is trying to repair relations with Europe over the botched withdrawal from Afghanistan in the summer, which led to Taliban control and the controversial nuclear submarine deal with Australia. The Biden deal allows “limited volumes” of steel and aluminum products from the European Union to enter the United States tariff-free, according to U.S. Commerce Secretary Gina Raimondo said. In return, the European Union will drop their retaliatory tariffs on some American goods. The EU was looking to increase tariffs on various American goods to 50% such as Harley-Davidson motorcycles and bourbon from Kentucky.
“We have agreed to pause our steel & aluminium trade dispute and launch cooperation on a Global Arrangement on Sustainable Steel & Aluminium,” the EU’s trade chief, Valdis Dombrovskis said on Twitter on October 30, 2021.
European Producers
ArcelorMittal S.A. is a multinational steel manufacturing corporation headquartered in Luxembourg City. It was formed in 2006 from the takeover and merger of Arcelor by Indian-owned Mittal Steel. “The EU has announced safeguard measures but they weren’t effective,” ArcelorMittal Chief Executive Lakshmi Mittal told Frankfurter Allgemeine Zeitung in 2019. “Further measures are urgently necessary given the import tariffs U.S. President Donald Trump has imposed on steel imports to the United States.”
At the time, billionaire Mittal said imports into the European Union had increased by 30% to 40% since 2017.
U.S. Market
U.S. steelmakers have benefitted from Trump’s America First policy as profits increased for steel companies. U.S. steelmakers said demand for steel will remain strong deep into 2022. The higher steel prices have generated interest into creating new steel mills in the U.S. However, if supply chain bottlenecks end and foreign steel is able to be dumped in the U.S., it could impact domestic producers. U.S. steel producers are seeing strong steel demand from the automobile sector due to healthy customer activity and increased household savings.
Keywords: United States Steel Corporation.