EU Pushes for Metal Tariff Talks with US Amid 50% Tariff Dispute

The European Union is pushing to restart negotiations on metal tariffs with the United States. The EU's trade chief is set to meet with the U.S. trade representative during the ASEAN ministerial meeting in Kuala Lumpur this week to discuss the stalled talks on reducing tariffs on steel and aluminum exports. The EU has proposed significant reductions or the elimination of these tariffs, which have been a point of contention between the two regions.

The EU's proposal includes establishing a quota system for steel and aluminum trade, where all EU exports within the quota would benefit from reduced or zero tariffs. This approach aims to create a more predictable and stable trading environment, which is crucial for the EU's industries. However, the U.S. has not yet responded to this proposal, and further details are expected to be discussed during the upcoming meeting.

The EU's initiative is a follow-up to the trade political agreement reached in July, which saw the U.S. impose a 15% tariff on most EU products, while the EU committed to lifting tariffs on U.S. industrial goods. Both sides also agreed to work towards reducing the 50% tariff on EU steel and aluminum products. However, the situation became more complex when the U.S. imposed a 50% tariff on over 400 new products containing steel and aluminum in August.

The EU is currently developing a specific plan to address this issue and has already presented a proposal to the Trump administration. However, a concrete response from the U.S. is still pending. The EU's efforts to resolve this issue have been met with criticism from several member states, including Germany, which has expressed concerns about the trade agreement. The EU, however, maintains that the agreement is the best option under the current circumstances, providing predictability for European businesses and preserving transatlantic cooperation on security and defense issues, particularly regarding Ukraine.

The U.S. has yet to fulfill some key commitments under the agreement, notably the reduction of tariffs on EU automobiles from 27.5% to 15%. The dispute over metal tariffs has been ongoing since the Trump administration's first term, when high tariffs were imposed on steel and aluminum products. Despite efforts during the Biden administration, the issue remains unresolved. With Trump's return to the White House, all tariff exemptions were revoked, and the tariff rate was increased to 50%.