“We have agreed with the United States to put our trade dispute on steel and aluminum on hold and launch a cooperation regarding a global agreement on sustainable steel and aluminum,” Dombrovskis said through his Twitter account.
“Our agreement will be announced tomorrow by the President of the European Commission, Ursula von der Leyen and the President of the United States, Joe Biden,” he added.
It also ends one of the biggest areas of friction between the allies and allows them to focus on negotiating new global trade deals to address global steel and aluminum overcapacity primarily focused on China and reduce carbon emissions from the industries.
US officials did not specify the volume of duty-free steel that will be allowed in the United States under a tariff quota system agreed upon with the EU. Sources familiar with the matter, who spoke on condition of anonymity, told Reuters that annual volumes in excess of 3.3 million tonnes would be subject to levies.
The agreement grants an additional two years of duty-free access above the quota for European Union steel products that obtained exclusions from the Commerce Department last year, according to US officials.
The pact requires that the EU’s steel and aluminum be produced entirely in the bloc, a standard known as “melt and pour”, to qualify for duty-free status. The provision is intended to prevent metals from China and non-EU countries from being minimally processed in Europe before being exported to the United States.
“The agreement to ultimately negotiate a carbon-based provision on steel and aluminum trade addresses both Chinese overproduction and carbon intensity in the steel and aluminum sector,” the national security adviser told reporters. of the White House, Jake Sullivan.
“It shows that we can solve the climate crisis and at the same time better protect our workers, that we don’t have to choose between the climate or the economy.”
President Joe Biden has sought to amend relations with European allies after the Trump presidency to more broadly confront the economic practices promoted by China, which led Beijing to build excess steel production capacity that has flooded global markets.
The deal also removes Europe’s retaliatory tariffs on American products, including whiskey and Harley-Davidson motorcycles, which were scheduled to double on Dec. 1, Washington officials said.
The United States allows duty-free imports of steel and aluminum from North American trading partners Mexico and Canada, with a mechanism that allows re-imposition of tariffs in the event of an unexpected “surge” in import volumes.
With information from Reuters and EFE
