U.S. Weighs Quota System in Bid to End EU Steel-Tariff Feud
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President Joe Biden’s administration is considering a quota system as it prepares a proposal for the European Union to resolve a dispute over steel and aluminum imported from the bloc.
The Office of the U.S. Trade Representative and the Commerce Department also are looking at increased monitoring of the origins of the metals produced in the EU as a potential part of the solution, according to people familiar with the administration’s internal discussions, who asked not to be named because they’re private. The U.S. hasn’t yet made the proposal formally to the EU, the people said.
The so-called tariff-rate quotas allow countries to export specified quantities of a product to other nations at lower duty rates, but subject all imports of the product above a pre-determined threshold to a higher duty, according to the USTR’s website.
Earlier this year, the U.S. stressed in conversations with EU counterparts that it sees the underlying problem of global steel overcapacity as a shared one, largely caused by China, and that the U.S. and EU need to work together.
“We continue to have productive conversations with the EU to address our shared concerns about excess capacity, and ensure the long-term viability of our steel and aluminum industries,” USTR spokesman Adam Hodge said in an emailed response to questions.
The Commerce Department didn’t respond to a request for comment.
Then-President Donald Trump in 2018 slapped a 25% duty on steel imports and 10% on inward-bound shipments of aluminum from producers including the EU using section 232 of the 1962 Trade Expansion Act. The statute allows for levies without a vote by Congress if imports are deemed a national-security threat. The former president said the tariffs were needed to protect the domestic industry from going under.
While Biden has kept the duties in place, and Commerce Secretary Gina Raimondo has defended them, some American manufacturers have said they’ve hurt their business.
The Biden administration is taking into account the political clout of organized labor, a core Democratic constituency.
The EU and U.S. in May agreed to avoid escalating their dispute over the tariffs, sparing iconic products such as bourbon whiskey and Harley-Davidson motorbikes from a doubling of EU reciprocal duties. The move was meant to create space to try to resolve the steel and aluminum dispute by year-end as both sides seek to rebuild their economic alliance.
Then in June the two parties reached a truce in a dispute over illegal aid to Airbus SE and Boeing Co., agreeing to a five-year suspension on tariffs affecting various goods while talks take place to find a permanent solution to the disagreement.
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