US says dispute with European Union over industrial metals tariffs may be resolved soon

·4-min read

The US government said on Monday that it may resolve a dispute with the European Union over punitive tariffs on industrial metals soon as part of efforts to clear outstanding issues that might hamper work at a trade and technology forum that starts this week.

US Secretary of State Antony Blinken, US Trade Representative Katherine Tai and other senior officials from US President Joe Biden’s administration will host EU trade chief Valdis Dombrovskis in Pittsburgh, Pennsylvania, for the inaugural meeting of the US-EU Trade and Technology Council (TTC).

Formation of the body was announced in June, when Biden visited Brussels, as a way to promote “a democratic model of digital governance,” and is seen as a wider push by the US leader to strengthen alliances that will push back against China.

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Talks to resolve the Section 232 tariffs placed on steel and aluminium are “on a separate track that was started back in June with the announcement that we would work with the European Union on these sectors, with the aim by the end of the year having a path forward, and those conversations have been ongoing, and will continue to to proceed”, a senior Biden administration official said.

Asked about the prospects for a resolution on the issue at an event in Washington earlier on Monday, Dombrovskis was quoted by Politico as saying: “We can be moderately optimistic about being able to resolve this dispute and find this solution and, in essence, not continue this Trump-era approach of confrontation between EU and US in trade.”

The meeting will take place just two weeks after a diplomatic row between the US and France caused when the secretly finalised submarine deal with Australia, part of the Aukus trilateral military partnership, was announced. The move led to Paris temporarily pulling its ambassador from Washington.

One EU source familiar with the preparations for Wednesday’s meeting said that Dombrovskis’ delegation had “very broad support” from member states despite the diplomatic dust-up between the US and France, and that they were “resolving final outstanding minor issues” that will allow the two sides to issue a statement while in Pittsburgh.

Without confirming that France specifically had any remaining issues, the source said 26 of the 27 EU states were on board with the TTC agenda.

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The agenda will include technology standards cooperation, supply chain security, data governance, “misuse of technology threatening security and human rights”, export controls and investment screening, according to another official in the US government briefing.

He added that talks aimed at alleviating a semiconductor shortage is the first priority the two sides will cover.

“The semiconductor shortage has been a top priority for the president [Biden] and his economic and national security teams,” he said. “It’s also been the top priority in Europe. We’ve been working overtime to address it.”

The first official added that a deal by the two sides in June to end a damaging dispute over subsidies to rival plane makers Boeing and Airbus, and phase out billions of dollars in punitive tariffs would serve as a template for cooperation.

US Trade Representative Katherine Tai in Washington on April 28. Photo: Getty Images via AFP
US Trade Representative Katherine Tai in Washington on April 28. Photo: Getty Images via AFP

The framework used to resolve that stand-off “will help strengthen the aerospace industry, help secure good-paying jobs on both sides of the Atlantic and suspend the [World Trade Organization] sanction tariffs for five years”, she said.

“The deal also lays the groundwork to address our shared challenges with China and other non-market economies.”

The two sides are also working through separate channels to replace a mechanism agreed to in 2016 regarding data transfer to the United States.

European Court of Justice ruled last year that the EU-US Privacy Shield – established as a blanket protection clause for personal data of Europeans sent to the US for commercial use – cannot guarantee that the data will be shielded from surveillance by the US government.

“We are going to continue negotiating a very regular pace over the next couple of weeks and months to try to get a new US adequacy agreement” on data privacy, the second administration official said.

Additional reporting by Finbarr Bermingham

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