The EU has agreed to shelve plans to boost tariffs on a range of US products as the two sides seek a resolution to a longstanding stand-off over the steel and aluminium sectors.
Brussels said in a joint statement with the Biden administration that the EU and US had agreed to avoid changes that “negatively affect bilateral trade” as they open discussions to address global excess capacity in the two sectors.
The move means the EU will no longer go ahead with a planned increase in tariffs on a range of US products that was previously scheduled for the start of next month. The two sides have now given themselves until the end of the year to engage in discussions about the oversupply of steel resulting from production in countries including China.
The EU’s move relates to a dispute running since 2018 when former president Donald Trump imposed duties on aluminium and steel from Europe and other economies, saying the measures were needed for national security reasons.
The EU retaliated with its own tariffs on a range of products, which it was preparing to boost on June 1. In its first round the EU hit high-profile US products including bourbon, clothing and motorcycles.
Monday’s move comes ahead of a planned summit between the EU and US President Joe Biden next month which will aim to improve transatlantic relations following the tumult of the Trump years. Valdis Dombrovskis, executive vice-president at the European Commission, said the decision to suspend the automatic increase of the retaliatory tariffs showed the EU was taking steps to “reboot the transatlantic relationship”.
He announced the truce on Monday in a joint statement with US Trade Representative Katherine Tai and Secretary of Commerce Gina Raimondo.
The two sides said they had agreed to discuss “steel and aluminium excess capacity and the deployment of effective solutions, including appropriate trade measures, to preserve our critical industries”, the statement said.
“To ensure the most constructive environment for these joint efforts, they agreed to avoid changes on these issues that negatively affect bilateral trade.”
Dombrovskis added: “By suspending our measures, we are creating the space to resolve these issues before the end of the year.
“The EU is not a national security threat to the US. But the distortions created by global excess capacity — driven largely by third parties — pose a serious threat to the market-oriented EU and US steel and aluminium industries and the workers in those industries.”
Earlier this month Dombrovskis told the Financial Times he was also increasingly hopeful of securing a deal with the Biden administration to end a 16-year feud over subsidies for Airbus and Boeing.
The EU and US were engaging “very intensively” on resolving their trade disputes, he said, as he hailed a “very welcome shift” since Biden’s administration took office in January.