At their summit last week, the EU and the US announced with great fanfare a new stage of trade cooperation with the Biden presidency. Both parties entered into an agreement to suspend tariffs in the dispute over subsidies to the world’s largest aircraft manufacturers, Airbus and Boeing.
But for now They have only agreed to pause for five years the mutual tariffs worth 10 billion euros that have affected products such as European wine or American tobacco. In other words, the trade dispute is far from over and the EU’s industrial employers insist on urgency.
“I think that the two big trading blocs need to keep negotiating and find solutions, because nor we can continue like this for the next decade. “, has pointed out Axel Eggert, general director of the Association of European Steel.
The EU and the US failed to make substantial progress in the other tariff dispute that penalizes EU steel and aluminum exporters. The Trump administration used a legal ploy that was passed during the Cold War in 1962 that allows the United States to impose tariffs on national security grounds. Before Trump made it his favorite weapon, it had hardly been used. But when are these tariffs going to be lifted?
“We have now created the space to find a solution by suspending EU countermeasures for six months, so this gives us space to sit down and discuss in more detail to find a solution “, detailed the president of the European Commission, Ursula von der Leyen.
An end-of-the-year deal is too complicated according to some experts. The political climate in Washington is not conducive to such a positive outcome before next year’s congressional elections.“Steel and aluminum, but particularly steel, is an industry that plays an important political role in several hinge districts for the House of Representatives. The Democrats only have a majority of six, so they are basically doing what they can to protect the others “, explains Jacob Kirkegaard, of the German Marshall Fund.
However, Biden wants a quick solution to the problem of tariffs, which is only maintaining an unnecessary dispute with his closest ally. According to the White House, the United States and the EU should direct their economic attention to China instead of imposing mutual taxes. China is supplying a glut of cheap, low-quality steel to world markets.
“The EU and the US are the two main blocs suffering from global steel overcapacity driven by state aid schemes and subsidy schemes. They are the ones who suffer the most. So, with other partners like Japan, like Canada , like others, we have to find solutions together and very soon “, Eggert has defended. Now the allies have to show if they are serious.