World trade: EU and USA do not settle trade dispute

The EU and the USA have failed in their attempt to resolve important trade disputes at a summit on Friday.

World trade: EU and USA do not settle trade dispute

The EU and the USA have failed in their attempt to resolve important trade disputes at a summit on Friday. According to diplomats, the two sides were unable to agree on how to eliminate competitive disadvantages for European steel and aluminum exporters in the US market in the long term.

There was also no agreement on a planned agreement on trade facilitation for minerals used in the production of vehicle batteries. This is intended to ensure that EU companies are not excluded from automotive supply chains because of a new US subsidy program.

This danger currently exists because new tax breaks for clean vehicles in the USA stipulate that the subsidies can only be fully used under certain conditions. One is that the vehicles' batteries were produced with minerals from North America or that they come from a country with which the US has a free trade agreement or a major minerals agreement.

A solution should be found by 2024

The other dispute concerns special tariffs on steel and aluminum imports introduced by then US President Donald Trump in 2018. Their impact was severely limited in 2021 by a preliminary deal between Brussels and Washington. However, this also stipulates that a long-term solution should be found by 2024.

The reason for the failure of the negotiations before the top meeting between US President Joe Biden, EU Commission President Ursula von der Leyen and EU Council President Charles Michel in the White House on Friday evening (CEST) was cited by Brussels as insufficient accommodation from the USA. For the dispute over special tariffs on steel and aluminum imports, the USA only wanted to accept solutions that were not in line with the rules of the World Trade Organization (WTO). In the negotiations on the agreement on important minerals, Washington is said to have insisted, among other things, that initially only a comparatively small number of raw materials be included.

According to diplomats, both sides want to give themselves a little more time to find compromises. If this does not succeed, special tariffs could be due again on all European steel and aluminum exports to the USA in 2024. The EU is then likely to reintroduce its special tariffs on US products such as bourbon whiskey, Harley-Davidson motorcycles and jeans. These were enacted in retaliation for steel and aluminum tariffs imposed by Trump.

NEXT NEWS