When President Joe Biden meets with European leaders next week, he will commit to dropping tariffs protecting U.S. steel and aluminum and resolving other trade disputes this summer, according to a report from Bloomberg News.
The Trump administration put in place tariffs on steel and aluminum that it said were necessary to prevent the U.S. from becoming dependent on foreign metals, a situation that an extensive government review said would be a threat to national security. China’s share of global crude steel production increased from 53.3 percent in 2019 to 56.5 percent in 2020. Although the U.S. imports little to no steel from China directly, China’s overproduction depresses prices in the global market.
Part of the concern over becoming import metals dependent is that other countries could attempt to use their steel and aluminum production to constrain U.S. policy. Even a close ally such as France or Canada could attempt to use our oil dependence to influence U.S. policy on climate change or threaten to cut off supply seen as supporting the U.S. in a military conflict those countries oppose.
An EU official told CNBC that the European Union is looking to “push” the United States to agree on “an easing” of the Trump trade tariffs.
CNBC’s report said “experts say the jury is still out on how much joint cooperation there will be between the Biden administration and the EU” while Bloomberg’s indicated the surrender of metals tariffs was practically a done deal.
Bloomberg, CNBC, and Reuters said they had reviewed a draft statement that would be issued at the conclusion of an EU-U.S. summit in Brussels set to begin on June 15.
The European Union retaliated against the U.S. tariffs, ironically demonstrating the point that the Trump administration had made about the potential for policy disputes dividing the U.S. and Europe, by slapping tariffs on a range of big-brand products made in areas that elect influential U.S. politicians. Tariffs were put on Kentucky bourbon, for example, in hopes that Senator Mitch McConnell would help push for a resolution of the trade dispute.
The draft commits both sides to dropping those tariffs by December.
The draft document also sets forth a July 11 target for the resolution of the long-running dispute over aircraft manufacturing between the U.S. and Europe.
In 2019, the World Trade Organization said that the U.S. could impose tariffs on $7.5 billion of EU exports annually to offset government support for Airbus. The WTO also gave the. E.U. permission to levy taiffs on $4 billion of U.S. goods in retaliation for subsidies for Boeing. Both sides have agreed to hold off on imposing tariffs until July in hopes of working out a deal to avoid mutual tariff escalation.
The document is still in draft form but has been reviewed by both U.S. and E.U. officials, Bloomberg reported.