US President Biden Extends EU Steel-Aluminum Tariff Halt
By Strategic Research Institute on Dec 29, 2023 11:57 am
Synopsis
President Biden extends the suspension of tariffs on European Union steel and aluminum for two more years. This move replaces tariffs imposed by Trump, aiming to address excess metal production globally, particularly in non-market economies like China, and to promote eco-friendly steel production. The extension allows a certain quota of EU steel and aluminum into the U.S. tariff-free, fostering ongoing negotiations.
Article
In a decisive diplomatic stride, U.S. President Biden has extended the hiatus on tariffs for European Union (EU) steel and aluminum, effectively elongating the respite by an additional two years. This strategic move, enacted since January 2022, replaces the prior imposing tariffs wielded by former President Trump with a more nuanced tariff rate quota (TRQ) system.
In response to the U.S. tariffs, the EU levied retaliatory measures encompassing an array of American commodities, ranging from Harley Davidson motorcycles to bourbon whiskey and power boats. These retaliatory actions, mirroring the bilateral standoff, were also suspended until the year 2025, offering a ceasefire post both sides' elections.
The core focus of this bilateral negotiation between the U.S. and the EU revolves around tackling the surplus production capacity prevalent in non-market economies, predominantly China. Additionally, the discussions aim to foster a transition towards sustainable, environmentally conscious steel production. However, the initial deadline of 2023 for resolving these matters had seen an impasse.
In a presidential proclamation, Biden acknowledged the strides made in the bilateral discussions, emphasizing substantial progress while ensuring a continuous discourse between the two sides.
Under the revamped TRQ mechanism, a stipulated allowance of 3.3 million metric tons of EU steel and 384,000 metric tons of aluminum can enter the U.S. sans tariffs, correlating with historical trade levels. Any surplus over this quota will be subject to the imposed tariffs. This exemption extends until December 31, 2025, promoting trade predictability.
Biden's retention of tariffs at current levels for non-EU countries underscores the administration's persistent stance on shielding domestic industries from global overcapacity and carbon emissions. The move reflects a commitment to fortify national security through self-sufficient steel and aluminum production.
United States Trade Representative Katherine Tai stated, “Under President Biden’s leadership, the United States is committed to defending workers, communities, and domestic industries from global non-market overcapacity and excessive carbon emissions."
U.S. Secretary of Commerce Gina M. Raimondo said, "President Biden’s economic agenda is rooted in standing up for American families, workers, and businesses."
The TRQ extension will take effect on January 1, 2024, and last until December 31, 2025. Last week, the European Union announced a continued suspension on tariffs on U.S. goods for a 15-month period.
Conclusion
President Biden's decision to extend the suspension of tariffs on EU steel and aluminum for two more years demonstrates a commitment to ongoing negotiations aiming to address global excess metal production and foster eco-friendly steel manufacturing. This extension offers a structured quota system and trade predictability while safeguarding domestic industries on both sides of the Atlantic.
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