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Politico: European Commission President Ursula von der Leyen is reportedly willing to “give in to American pressure” to join a new steel and aluminum club with the U.S., a move aimed at fending off China’s rise in the metals market. This comes ahead of her summit with U.S. President Joe Biden and signifies a notable shift in EU trade policy. The agreement between the U.S. and the EU would replace the threat of reimposed U.S. tariffs on European steel and aluminum with a joint “protective wall” around their markets.
However, this decision is causing “unease” among European trade officials and some EU capitals, who are concerned about adhering to World Trade Organization (WTO) rules. A U.S. version of the negotiating document indicates that joint tariffs of “at least 25 percent on steel and 10 percent on aluminum” would be imposed on non-market economies within six months of the agreement taking effect.
The proposed club also includes environmental conditions, specifically to limit CO2 emissions in steel and aluminum production, although this won’t be enforced until 2026. Brussels is also pushing back against Washington’s desire to be exempted from the EU’s carbon border levy.
The agreement, if finalized, will likely raise questions about its compliance with WTO rules, possibly further undermining the WTO’s role as a global trade referee. Both sides aim to finalize this political ambition into a binding deal by January 1.
The entire article can be read at the link https://www.politico.eu/article/von-der-leyen-yields-to-us-protectionism-as-she-heads-to-washington/
