EU to Warn Lutnick Against Expanding US Steel Tariff Scope
European Union officials are concerned a US push to expand the list of EU products subject to higher steel and aluminum tariffs may run afoul of the spirit of the trade agreement they signed this summer.
The EU’s trade chief, Maros Sefcovic, as well as trade ministers from the bloc’s 27 member states, will raise the issue with US Commerce Secretary Howard Lutnick when they meet in Brussels Nov. 24, according to people familiar with the matter. EU ambassadors prepared for the intervention last week.
The trade deal, agreed between European Commission President Ursula von der Leyen and US President Donald Trump in August, was to remove many of the bloc’s tariffs on American goods while putting a 15% tariff ceiling on most European products going into the US.
The EU still faces a 50% duty on steel and aluminum exports as well as on many other derivative products that contain the metals. Washington revises the list of derivative products that are subject to the higher tariff rate several times a year.
The EU is particularly concerned that the breadth of goods hit by the 50% metals rate — currently surpassing 400 items — as well as potential new, higher levies on different industries will dilute the EU-US trade deal and the agreed 15% tariff ceiling, said the people who spoke on the condition of anonymity.
Olof Gill, a commission spokesperson, said EU officials are focused on working with the US to fully implement the trade deal.
“The Commission continues to engage with the US both at political and technical levels,” he said in an email.
The 15% tariff ceiling applies to cars and the EU is keen to ensure that it will also cover other industries the US might hit with sectoral duties in the future. As part of the accord, a small number of EU goods benefit from lower rates, while the bloc has presented legislation to scrap tariffs on US industrial goods and some non-sensitive agricultural exports.
Implementation of that legislation is still pending approval in the European Parliament, where lawmakers have singled out the inclusion of products subject to the 50% metal tariffs as a major source of concern.
The EU believes that the spirit of the agreement means that the 15% rate should cover industries beyond cars, pharmaceuticals, chips and wood that are explicitly referenced in the deal, according to the people.
The commission, which handles trade matters for the bloc, also wants a quota system that would allow a certain amount of the metals exports to receive lower duties and to work with the US and other partners on a mechanism to better regulate the trade to avoid cheap imports from flooding their markets.
Sefcovic will also meet with US Trade Representative Jamieson Greer Nov. 23, another person said, ahead of his talks with Lutnick the following day.
For its part, Washington has been demanding a legally binding agreement similar to those it negotiated with others, said the people. The US sent Brussels proposals earlier this year to revise EU regulations it said hurt American businesses. US officials have also been lobbying some member states directly, the people added.
The EU doesn’t want to commit to a legally binding accord as that would complicate its approval procedures, requiring greater involvement from both member states and parliament, according to the people.
The EU shared a draft action plan with the US last week to show its continued commitment to the trade deal, said the people. The plan covers five areas:
Tariffs and market access, including lowering levies on more goods;
Economic security issues such as investment screening, export controls and the supply of critical raw materials;
Regulatory cooperation on issues such as standards, digital trade, technical barriers and other trade grievances;
Monitoring the strategic purchases and investments the EU pledged to make in liquefied natural gas and chips;
Cooperation on steel and aluminum where the bloc wants to work with the US to tackle global overcapacity.
Source : Bloomberg.com
