EU, US launch talks to resolve steel tariffs row

BRUSSELS: The EU and US took a step towards a post-Trump trade truce on Monday, agreeing to hold talks to end a tit-for-tat feud over steel and aluminium tariffs.

In a carefully phrased statement, United States Trade Representative Katherine Tai and her EU counterpart Valdis Dombrovskis announced "the start of discussions to address global steel and aluminium excess capacity" that would also address China's outsize role in the problem.

The Europeans will in addition temporarily suspend a plan to increase tariffs on the US, the EU said.

The peace offering is the latest chapter in a row that began in June 2018 when former president Donald Trump imposed US tariffs of 25 percent on steel and 10 percent on aluminium from Europe, Asia and elsewhere.

Brussels responded with counter-tariffs on 2.8 billion euros worth of iconic US products, including bourbon whiskey, jeans, orange juice and Harley-Davidson motorbikes.

The EU was planning to increase those counter-tariffs on June 1, but given the easing of tensions with the Biden administration, said it would refrain from doing so.

In return, both sides have agreed to engage in a dialogue on the overproduction of steel, a problem that has helped depress prices with output, mainly from China, flooding the global market and putting steel plants in difficulty.

While never addressing the tariffs specifically, the statement said both sides "agreed to avoid changes on these issues that negatively affect bilateral trade".

Singling out China, the statement said that "the United States and EU member states are allies and partners, sharing similar national security interests as democratic, market economies".

This alignment, it added, means "they can partner to promote high standards, address shared concerns, and hold countries like China that support trade-distorting policies to account."

In an earlier sign of detente, both sides in March suspended punitive tariffs in the separate, two-decade long dispute over aircraft manufacturers Airbus and Boeing.

Yet another fight over digital taxes slapped on US big tech by France, Spain and other EU nations has also mellowed, with all sides pursuing a global solution at the OECD.