EU agrees partial truce with US over Trump tariffs

The European Commission, which oversees EU trade policy, said on Monday it would suspend a planned hike of retaliatory tariffs for up to six months. These would have added US products from lipstick to sports shoes and doubled to 50 per cent duties on US bourbon whiskey, motorbikes and motor boats on June 1.

In a joint statement, Brussels and Washington said that, as allies, they could promote high standards, address shared concerns “and hold countries like China that support trade-distorting policies to account”.

The discussions would seek solutions before the end of the year to the issue of global steel and aluminium overcapacity.

A month ahead of a visit to Brussels by US President Joe Biden, one EU diplomat said it would have been “terrible optics” if the bloc had raised tariffs on Harley Davidson bikes and products of other US firms.

Bernd Lange, head of the trade committee of the European Parliament, said the United States needed to come to a EU-US summit with a “tangible commitment to reciprocate the EU gesture. Otherwise, tariff hikes would be justified.

US METAL TARIFFS STAY

The United States will maintain its tariffs of 25 per cent on steel and 10 per cent on aluminium, which also apply to imports from China, India, Norway, Russia, Switzerland and Turkey.

The Trump administration cited US. national security grounds as the basis for its metals tariffs – measures that steelmakers such as Thyssenkrupp and Voestalpine have said they were affected by.

The EU denied that its exports pose any security threat and responded by placing its own tariffs on 2.8 billion euros ($3.4 billion) of US products, including motorbikes, whiskey and orange juice. These will also remain in place.

The EU had urged the United States to suspend the metals tariffs for six months, mirroring the four-month suspension the two sides agreed in March for their aircraft subsidy dispute.

The Commission has said the US tariffs affect 6.4 billion euros of EU metal exports and that it would “rebalance” the remaining 3.6 billion euros after three years, or after a favourable ruling by the World Trade Organization.

Those three years expire were to expire in June. Its challenge at the WTO is ongoing.