EU Temporarily Suspends Retaliatory Tariffs on US Imports
Extension of Tariff Suspension
The European Union has decided to extend the suspension of tariffs imposed on U.S. imports as a countermeasure to the U.S. tariffs on steel and aluminum from the EU. This suspension will be in effect until the end of March 2025.
Background of the Trade Dispute
The decision, announced by the EU and reported by Reuters, is part of a broader deal in the ongoing trade dispute. The dispute dates back to 2018 when the U.S. imposed tariffs of 25% on EU steel and 10% on EU aluminum. As a response, the EU had introduced retaliatory tariffs on U.S. goods.
Terms of the Agreement
Under the agreement, the U.S. will also maintain the suspension of its tariffs, initially agreed upon for two years starting January 2022, but now extended to allow more time for negotiations. The deal includes a quota system, permitting up to 3.3 million tons of EU steel and 384,000 tons of aluminum to enter the U.S. duty-free, aligning with previous trade volumes. Amounts beyond these quotas will be subject to tariffs.
Negotiation Challenges and Impacts
Negotiations to address overcapacity in the steel and aluminum sectors have faced challenges, stalling before a significant US-EU summit in October. The EU has criticized the rigidity of the quota system, noting that it resulted in approximately $264 million in U.S. tariffs on EU steel last year. Meanwhile, the EU had removed its retaliatory tariffs.
