EU and US to lift several tariffs
As a result of a recent US-EU trade agreement, the EU will cancel a planned increase in retaliatory tariffs imposed on American products, originally meant to go into effect today.
The US will lift punitive tariffs on imported European steel and aluminum and allow limited amounts into the country tariff-free, as part of the new trade deal. This is the US’ first carbon-based sectoral international trade agreement to address binding climate standards and marks an improvement in strained relations following former US President Trump’s levying of tariffs against Europe in 2018.
Short-term, the arrangement will provide supply chain relief and help to reduce cost increases that have resulted from pandemic-related economic disruptions. It will also benefit European steel-producers, though European officials have protested the need for quota systems.
Leaders hope to implement the deal by 2024, but some political uncertainty surrounds this deadline, as negotiations will need to commence concurrently with the US presidential election and the European Commission’s prospective change in leadership. If successful, it would unite the US and EU to confront China’s relatively lax environmental standards. However, the deal’s pledge to restrict steel production from outside the EU will likely raise tensions with Beijing in the medium-term.
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