U.S. President Joe Biden, right, speaks with Ursula von der Leyen, president of the European Commission.
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ROME — The United States and the European Union on Saturday announced an easing of a trade dispute that started during the Trump administration.
The previous U.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 EU vehemently contested the move from the start and after multiple failed attempts to reach a deal with the Trump administration, the bloc took the case to the World Trade Organization and imposed retaliatory measures on up to 6.4 billion euros ($7.78 billion) of U.S. exports. The EU’s targeted products included Bourbon whiskey, peanut butter and orange juice.
Of this amount, the EU first targeted 2.8 billion euros of U.S. exports and said it would apply the remaining 3.6 billion euros three years later or after a positive result at the WTO. This second tranche of tariffs was put on hold earlier this year in a sign of good faith to the Biden administration.
“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 Saturday.
Details of the agreement, published on Sunday, showed that the idea of both sides is “to discourage trade in high-carbon steel and aluminum.”
In the meantime, the U.S. said it will not apply the metal tariffs and the EU will also suspend its related tariffs on American goods.
Speaking Sunday, President Joe Biden said the deal “immediately removes tariffs on the European Union on a range of American products and lowers costs on American consumers, and ensures a strong and competitive U.S. steel industry for decades to come.”
Biden also described the agreement as “a creative solution.”
The latest transatlantic announcement comes at a critical time for their relationship.
European allies have been somewhat worried about President Biden’s foreign policy, after the difficult withdrawal from Afghanistan in the summer, the controversial nuclear submarine deal with Australia and the lack of developments to fix trade disputes.
European Commission President Ursula von der Leyen said Sunday that their latest deal was a “major step forward in our renewed partnership.”