EU agrees partial truce with U.S. over Trump tariffs

FILE PHOTO: European Union flags flutter outside the EU Commission headquarters in Brussels, Belgium May 5, 2021. REUTERS/Yves Herman

BRUSSELS (Reuters) -The European Union has agreed a partial truce with the United States in a dispute over U.S. metals tariffs imposed by former president Donald Trump as the two sides start discussions on addressing global overcapacity in steel and aluminium.

The Commission said on Monday it would suspend a proposed hike in its retaliatory tariffs that would have added a number of products from lipstick to sports shoes and doubled to 50% duties on U.S. bourbon whiskey, motorbikes and motor boats.

In a joint statement, Brussels and Washington said that, as allies, they could promote high standards, address shared concerns “and hold countries like China that support trade-distorting policies to account”.

The discussions would aim to find solutions, such as on appropriate trade measures, by the end of the year.

The United States will maintain its tariffs of 25% on steel and 10% on aluminium, which also apply to imports from China, India, Russia, Turkey, Norway and Switzerland.

The Trump administration cited U.S. national security grounds as the basis for its metals tariffs – measures that steelmakers such as Thyssenkrupp and Voestalpine have said they were affected by.

The EU denied that its exports pose any security threat and responded by placing its own tariffs on 2.8 billion euros ($3.4 billion) of U.S. products, including motorbikes, whisky and orange juice. These will also remain in place.

($1 = 0.8221 euros)

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