December 3, 2021

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Steel contract. EU and US trip to Xi (and Trump)

After several months of negotiations, an agreement was reached between the European Union and the United States on tariffs on aluminum and steel exports. They remain the same, but with important exceptions. The curtain falls on the main action of the Trump era, and Biden embarks on a (another) tour of China

The most anticipated ceasefire, the most unexpected. The European Union and the United States have reached an agreement to ease tariffs on steel and aluminum exports.

The announcement was made by the US Secretary of Commerce during the G20 summit in Rome Gina Raymondo And EU Trade Commissioner Valtis Dombrovsky. Details of the deal will be presented by the US President at a press conference Joe Biden And Chairman of the European Commission Ursula van der Leyen This Sunday.

Thus one of the most unique activities of the Trumpian era. According to Bloomberg, The agreement would allow the removal of the respective taxes on exports of $ 10 billion per year. Raymondo explained to reporters that this was a “limited” suspension. The tariffs imposed by the Trump administration three years ago and the counter-tariffs to which the EU responded will actually be in effect. However, there will be some exceptions that allow lower prices of raw materials.

Aluminum has tripled in the past year, reaching a record high of $ 1900 a tonne. Thanks to the stress of supply chains due to epidemics and health emergencies. The then President in June 2018 Donald Trump The EU announced a 25% tax on steel exports and a 10% tax on aluminum for “national security” reasons.

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Behind this decision provoked a sharp backlash between the European allies and the Brussels counter-reaction, and above all there were reasons for internal consensus and work: creating jobs in production. To read the data of, only part is completed Office of Labor Statistics: A slight increase in the number of workers in the sector, which reached 389,100 in 2019, was wiped out by the epidemic a year later.

However, taxes on metals imported from Europe remain a popular policy for American companies in the industry and, above all, the unions. In fact the agreement announced by the United States must respect the precise terms. It starts with national security: EU aluminum and steel exempt from the tariffs of “Section 232” must be produced entirely in the EU. Precautions to avoid opening safe behavior for exports to China and other non-EU countries.

The deal, the US National Security Adviser said Jack Sullivan, Targets “both Chinese high production and the industry’s carbon emissions” and demonstrates that “we can solve the climate crisis and at the same time better protect our workers.” Thus the curtain falls on an important policy of the Trump era. At the beginning of this summer, in June, when Van der Leyen announced the suspension of the second installment of European counter-tariffs, negotiations deepened (the first had already reached 2.8 billion euros in exports from the United States). Later, Dombrovsky and the U.S. trade representative confirmed a crack during the G20 trade in Toronto. Katherine Damn.

On the map, however, there are no illusions: goodwill is slow and gradual. In fact, US tariffs remain an important part of China’s regulatory policy: Beijing alone accounts for more than half of world production. But they are also decisive at the political level. Steel and aluminum are at the center of industrial production in some swing states, such as Pennsylvania, which gave Biden a sprint ahead of last November’s presidential election.

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