US and EU End Tariff Dispute... Pursuing Global Agreement to Curb Chinese Steel

[Image source=Reuters Yonhap News]

[Asia Economy Reporter Kim Suhwan] The United States and the European Union (EU) have agreed to end the tariff dispute in the steel and aluminum industries and to pursue a new global agreement aimed at countering China.

On the 31st (local time), the US and the EU announced in a joint statement that they had resolved their steel and aluminum tariff dispute and expressed their intention to actively intervene in the issue of steel overcapacity.

US Removes Tariffs on EU Steel... EU Suspends Retaliatory Tariffs on US Products

They announced an agreement in which the US will remove tariffs imposed on EU steel and aluminum within certain limits, while the EU will suspend retaliatory tariffs on US products such as whiskey and Harley-Davidson motorcycles.

This marks the end of a trade conflict that escalated over three years ago when former President Donald Trump imposed tariffs of 25% on steel and 10% on aluminum imports from the EU in 2018.

President Joe Biden praised the agreement, saying, "The United States and the EU have made a significant breakthrough in protecting American jobs and industries while addressing the existential threat of climate change," adding, "We are entering a new era of transatlantic cooperation."

Ursula von der Leyen, President of the European Commission, who attended the press conference, also said, "I am pleased to announce that we have reached an agreement with President Biden to suspend tariffs on steel and aluminum and to cooperate on a new 'Sustainable Global Steel Agreement.'"

Bloomberg reported that negotiations for a global agreement will take place over the two years during which the tariff suspension will be maintained.

"Addressing Steel Overcapacity to Combat Climate Change"... Effectively Aimed at Countering China

They specifically stated plans to pursue a global agreement to address the global steel overcapacity issue in order to tackle climate change.

The White House released a statement saying, "The United States and the EU will work together to limit access to the market for 'dirty steel' and restrict access for countries dumping such steel into our markets."

President Biden more directly mentioned China, expressing that resolving steel overcapacity is effectively intended to counter China.

He emphasized, while discussing the global agreement, "We will limit access to our markets for dirty steel from countries like China and stand up to those countries that dump steel into our markets, causing significant harm to our workers, industries, and environment."

This clearly indicates that the global agreement is a measure to counter the cheap supply offensive and resulting overcapacity from China, the world's largest producer of steel and aluminum.

The European Commission stated in a press release, "This global agreement aims to ensure the long-term sustainability of our industries, promote the supply and trade of low-carbon steel and aluminum, and foster a market-friendly environmental recovery."

The US and the EU also emphasized that this demonstrates their joint commitment to counter global market distortions and that participation will be open to any interested countries.

The US Department of Commerce said that authorities are currently discussing steel and aluminum issues with countries such as Japan and the United Kingdom, focusing discussions on the overcapacity problem.

Valdis Dombrovskis, EU Commissioner for Trade, said, "We will invite like-minded countries to join this agreement."

The US focus is on strictly applying carbon emission standards to steel, allowing only products meeting these standards to be exported to the US, thereby countering China. Additionally, the US is emphasizing preventing Chinese steel from entering the US via the EU.

This content was produced with the assistance of AI translation services.