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US and EU agree to finish Trump-era dispute

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US President Joe Biden (right) speaks to Ursula von der Leyen, President of the European Commission.

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ROME – The United States and the European Union on Saturday announced an easing of a trade dispute that began during the Trump administration.

The previous US government imposed a tariff of 25% on European steel and a further 10% on aluminum in June 2018 for reasons of national security.

The EU vehemently opposed the move from the start and after several failed attempts to reach an agreement with the Trump administration, the bloc brought the case to the World Trade Organization and imposed retaliatory measures against up to 6.4 billion euros (7.78 billion US dollars Dollars) of US exports. EU target products included bourbon whiskey, peanut butter and orange juice.

Of this amount, the EU initially targeted 2.8 billion euros in US exports and announced that it would apply the remaining 3.6 billion euros three years later or after a positive result at the WTO. This second tariff tranche was suspended earlier this year as a sign of goodwill towards the Biden government.

“We have agreed to suspend our trade dispute over steel and aluminum and to work together on a global agreement on sustainable steel and aluminum,” said EU trade chief Valdis Dombrovskis on Twitter on Saturday.

Details of the agreement, published on Sunday, indicated that the idea on both sides was to “stop the trade in high-carbon steel and aluminum”.

In the meantime, the US has announced that it will not apply the metal tariffs, and the EU will also suspend its related tariffs on American goods.

President Joe Biden said Sunday that the deal “immediately removes European Union tariffs on a number of American products and lowers costs for American consumers and ensures a strong and competitive US steel industry for decades to come”.

Biden also called the agreement a “creative solution”.

The latest transatlantic announcement comes at a critical time in their relationship.

European allies have been somewhat concerned about President Biden’s foreign policy after the difficult summer withdrawal from Afghanistan, the controversial nuclear submarine deal with Australia and the lack of developments to settle trade disputes.

European Commission President Ursula von der Leyen said on Sunday that her latest deal was a “big step forward in our renewed partnership”.

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