US and EU reach temporary tariff truce on metals

The Biden administration is set to announce a truce in a dispute with the European Union over metals tariffs, freeing iconic products like American Bourbon whiskey from doubling EU tariffs next month, sources familiar with the matter said.

The decision could be announced as early as Monday, people said, who asked not to be named because the negotiations are private.

This is a high-profile controversy that began in 2018 under former President Donald Trump, when the US imposed duties on steel and aluminum from Europe, Asia and other countries over risks to US national security. Since then, the EU has retaliated and was expected to double tariffs on the list of American goods to 50% effective June 1.

Under the agreement with the Biden administration, the EU will refrain from raising these tariffs and both sides will engage in dialogue on overcapacity in steel production.

The European Union has previously proposed suspending all duties on each other's goods for six months while negotiations on a durable solution continue.

“We can only reiterate that the EU remains committed to finding a solution with the US on unjustifiably justified steel and aluminum tariffs and working with the US to address the root cause of the problem, which is global overcapacity in steel production,” It said on Saturday spokesman for the European Commission.

According to people, negotiators on both sides of the Atlantic are working on the final tariff cancellation, but are not yet ready for it.

Representatives from the U.S. Trade Representative's Office and the U.S. Department of Commerce did not respond to requests for comment.

President Joe Biden will attend the US-EU summit in Brussels next month during his first overseas visit as the country's leader. The White House said that Biden and his European colleagues intend to discuss trade cooperation.

Trump imposed a 25% tariff on steel along with a 10% duty on aluminum imports in March 2018, using an obscure national security clause in the 1962 trade law to justify his move. Several countries, including Brazil and South Korea, have made deals to avoid the duty, and Trump has lifted the duty on imports from Canada and Mexico. But tariffs are still valid for most of the world.

Iconic American products subject to EU counter-tariffs include Harley-Davidson Inc. motorcycles, Levi Strauss & Co. jeans. and bourbon whiskey. Business associations and lawmakers have asked the US to remove the duties, saying they do more harm than good.

The current tariffs “have already caused severe damage to American businesses and the workers they hire,” he said in a statement.