EU, US to keep talking about tariffs as war in Israel and Ukraine overshadow talks

US President Joe Biden (right) hosting EU Commission president Ursula von der Leyen (second from left) and European Council President Charles Michel (third from left) during the EU-US summit at the White House on Oct 20. PHOTO: AFP

WASHINGTON – United States and European Union negotiators failed to reach deals to settle longstanding trade disputes in time for a summit at the White House on Friday, but Washington said it would keep providing some relief from tariffs on steel and aluminium, and both sides said talks would continue.

Senior US administration officials said they made significant progress on the trade issues but more work was needed to reach deals on energy subsidies and the steel and aluminium market.

US President Joe Biden hosted European Council president Charles Michel and European Commission chief Ursula von der Leyen for a meeting dominated by discussions about the war between Israel and Hamas, and ensuring continued support for Ukraine in its now 600-plus day fight against Russia’s invasion.

“We are more united than ever,” the leaders said in a joint US-EU statement that touched on the war in the Middle East, Russia’s war in Ukraine and concerns about China, and pledged continued efforts to strengthen economic security, ensuring secure energy transitions in their economies and reinforcing multilateralism and international cooperation.

Mr Biden noted at the start of the meeting that the EU and US were standing together to support Israel and Ukraine, but would also discuss ways to address “unfairly traded steel and aluminium imports” and talks about critical minerals.

“Sometimes we have our differences,” Mr Michel said. “That’s why we are here: to cooperate, to find solutions that work for businesses and workers on both sides of the Atlantic.”

Trade negotiators had scrambled on Thursday to avoid the US resuming import tariffs on EU steel and aluminium imposed by then President Donald Trump in 2018, ultimately agreeing to keep the tariffs at bay while they keep talking.

The joint statement said negotiators had made “substantial progress to identify the sources of non-market excess capacity” and find ways to measure the emissions intensity of the steel and aluminium industries.

“We look forward to continuing to make progress on these important objectives in the next two months,” it said.

A senior US administration official said the US would roll over tariff rate quotes, or TRQs, by the end of the year if more time for talks was needed, adding: “We are committed to providing certainty to our industry and workers and to our EU partners.”

The United Steelworkers International labour union welcomed what it called the Biden administration’s commitment to defending domestic steel and aluminium workers instead of “bowing to outdated thinking on international trade and the EU’s political pressure.”

Friday’s move staves off the resumption of the Trump-era tariffs on EU-produced steel and aluminium that the Biden administration had agreed to halt in exchange for a quota system, but it was unclear how long a reprieve would be granted.

The Biden administration suspended tariffs on EU steel and aluminium imports on the condition that both sides agree by the end of October on measures to address overcapacity in non-market economies such as China, and to promote greener steel.

A second official said more work was needed to finalise an agreement, but there was no discussion of reinstating – or snapping back – Trump’s “national security” tariffs on steel and aluminium. “That is not on the table.”

Any deal seems far off, with Washington keen that the EU apply the metal tariffs to imports from China, and Brussels refusing to do so before a year-long investigation to comply with World Trade Organisation rules.

Negotiators would keep talking over the next two months, but Washington is already eyeing a two-year extension of the tariff relief, mindful of the challenges of getting a deal done in 2024 given EU elections in early June and US elections in November.

The summit also fell short on a deal to lessen the hit on European producers from the US Inflation Reduction Act, which offers consumers tax breaks to buy electric vehicles assembled in North America, by allowing critical minerals mined or processed in Europe to qualify for some of the tax credits.

The joint statement cited progress towards a “targeted” deal, and said the leaders looked forward to continuing negotiations in the coming weeks. REUTERS

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