Though it wasn't his administration's first priority (given the modest popularity President Trump's trade policies have enjoyed among the American public) President Biden and his team have agreed to roll back his predecessor's metals tariffs on the EU just before the levies were set to double next month, according to anonymous sources quoted by Bloomberg.
The final resolution could be announced as early as Monday.
President Donald Trump in March 2018 imposed a 25 percent tariff on steel and a 10 percent tariff on aluminum imports. Some countries were temporarily exempted from the tariffs. Currently, South Korea, Argentina, Australia, and Brazil are permanently exempted. The tariffs on Canada and Mexico were lifted with the signing of the U.S. Mexico and Canada Agreement.
During the same month in 2018, Trump fired the first salvo in the trade war with China, imposing tariffs on $50 billion of Chinese goods. Both Europe and China responded with retaliatory tariffs. Iconic American products affected by EU counter-tariffs include Harley-Davidson Inc motorcycles and Levi Strauss & Co jeans.
Under the deal that's being discussed, Washington and Brussels will scrap all planned tariff increases on metals, while engaging in a dialogue on steel overcapacity.
The EU previously proposed that both sides suspend all duties for six months while negotiations on a long-term solution continue.
"We can only reiterate that the EU remains committed to finding a solution with the US to the unduly justified tariffs on steel and aluminium and to working with the US in tackling the root cause of the problem, which is the global steel overcapacity," a spokesperson for the European Commission said yesterday.
A spokesperson for Biden's Office of the US Trade Representative and Commerce Department didn’t respond to Bloomberg's requests for comment, though Bloomberg added (citing its anonymous sources) that neither side is currently ready to immediately reduce all tariffs.
Which makes sense - at least when it comes to the US. Since as we have previously pointed out, even Biden's Commerce Secretary, former Rhode Island Governor Gina Raimondo, has acknowledged that the metals tariffs have saved jobs. "With respect to tariffs, there is a place for tariffs. The 232 tariffs on steel and aluminum have in fact helped save American jobs in the steel and aluminum industries," Raimondo said, marking a rare point of agreement with the policies of the prior administration.
"So what do we do with tariffs? We have to level the playing field. No one can out-compete the American worker if the playing field is level," Raimondo continued.
“And the fact is, China’s actions are uncompetitive, coercive, underhanded. They’ve proven they’ll do whatever it takes. And so I plan to use all the tools in my toolbox as aggressively as possible to protect American workers and businesses from unfair Chinese practices.”
More recently, in a Senate Finance Committee hearing Wednesday, US Trade Representative Katherine Tai defended the tariffs as well, saying they “have really roiled our economy, but were necessary to address a global overcapacity problem driven largely but not solely by China."
Though it's not yet official, rumors about Biden finally taking steps to dial back Trump's trade war policies have been circulating in recent weeks. There have been reports that Biden officials are starting up talks with the Chinese, as well as the Europeans.