News & Trends – Trade dispute ends

EU and US end years-long tariff dispute

04.11.2021

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The United States and the European Union have agreed to end a simmering dispute over steel and aluminium tariffs imposed by former US President Donald Trump in 2018. This removed a disruptive factor in transatlantic relations and averted a rise in retaliatory EU tariffs.

The EU and the US have settled their long-standing dispute over US tariffs on steel and aluminium imports from Europe. As US Commerce Secretary Gina Raimondo announced on the sidelines of the G20 summit in Rome at the end of October 2021, the special tariffs imposed by former US President Donald Trump three years ago will be lifted.

Accordingly, “limited quantities” of steel and aluminium from the EU could again be imported duty-free into the USA. In return, the EU would refrain from imposing tariffs on US products such as whiskey, jeans and Harley Davidson motorbikes.

The trade conflict was instigated in 2018 by then US President Donald Trump. Trump had imposed special tariffs on steel and aluminium imports. The EU responded with retaliatory tariffs on US products such as jeans, bourbon whiskey, motorbikes and peanut butter. Trump had justified the special tariffs with “national security interests”. The EU found this implausible and assumes that the aim was to protect the US economy from unwanted competition.

Already in May, the EU had taken steps to improve relations. Special tariffs on products such as aeroplanes, wine or ketchup were suspended until 2026. For some retaliatory tariffs, the EU waived planned increases. For example, the EU imposed only a 25 percent duty on American whiskey instead of the 50 percent initially planned. New tariff increases would have been due on 1 December. This has now been averted with the agreement.

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