2023-12-19 17:15:25
The United States and the European Union have managed to avoid the return of customs tariffs on mutual exports of steel and aluminum: their suspension, which was to end on December 31, was extended on Tuesday until March 31 2025 by the EU, and a reciprocal announcement is expected by the United States.
This leaves a little room to find a final agreement. At stake is the question of the survival of metallurgical industries on both sides of the Atlantic, destabilized by overproduction from China, while, at the same time, the EU wishes to decarbonize a highly emitting sector.
– What is it regarding ? –
Former US President Donald Trump introduced tariffs of 25% on European, Mexican and Canadian steel and aluminum in 2018, believing that the American steel industry was the target of unfair competition.
Mr. Trump then justified his decision by questions of threat to internal security, one of the reasons for circumventing the rules of the World Trade Organization.
The EU immediately responded. Then common ground was found upon the arrival of Joe Biden at the White House. Customs duties had been suspended on the basis of mutual export quotas, while a final agreement was reached, which should have been reached in October. But the negotiations are slipping.
– Why is it blocking? –
On the European side, the Carbon Border Adjustment Mechanism (CBAM), which has just come into force, has added an additional difficulty. It should make it possible to decarbonize European industry while countering commercial practices on Chinese steel, deemed unfair, by imposing a customs duty on steel produced in a polluting manner outside the EU.
Washington would like the creation of a “green steel club”, which would allow the establishment of such a mechanism imposed on steel coming from third countries, “a more protectionist approach once morest Chinese products entering in the American market,” estimates Emily Benson, researcher for the Center for Strategic and International Studies (CSIS).
The French Minister for Foreign Trade, Olivier Becht, however, recently clarified to AFP that such a solution would require putting the MACF through the European legislative process once more, which is unthinkable.
According to the European Commissioner for Trade, Valdis Dombrovskis, the main obstacle to an agreement is the American refusal to propose a real plan to exit existing customs tariffs.
On the United States side, the Trade Representative (USTR), Katherine Tai, spoke in a press release on Tuesday of “technically complex negotiations”.
“Our goal is to forge a forward-looking agreement that will allow us to join forces economically to encourage fair and clean production and trade in the steel and aluminum sectors,” he said. she assured.
– What avenues? –
The two parties “are far apart” on this idea of a green steel club, judges Inu Manak, trade policy researcher at the Council on International Relations (CFR).
If the extension of the truce does not resolve the basic problems, it “will reduce the economic impact of a return to customs tariffs”, she underlines.
The European and then American elections in 2024 will delay a potential agreement. Politically, ending this taxation “might have a cost for Joe Biden, who does not want to be accused of destroying worker jobs” in the middle of the electoral campaign, explains Sanjay Patnaik, researcher at the Brookings Institution.
But “if the United States wants to maintain its influence in the establishment of international trade rules, it needs partners,” recalls Ms. Manak.
One of the difficulties lies in the way these customs tariffs are implemented, by product category and European country of origin. Part of the sales of large exporters therefore remains subject to customs duties which, according to the European Commission, represent 350 million dollars annually.
Mr. Dombrovskis hopes to “improve” this point, but American concessions are unlikely, according to several analysts.
– Decarbonize to reach an agreement? –
For now, the general opinion is that additional regulatory efforts are necessary to reduce the sector’s carbon emissions.
The United States proposes to calculate emission targets at the level of the entire sector, while the EU for its part wishes to impose objectives per company.
“I think that recognition by the United States of the EU’s calculation methods would make it possible to obtain an agreement very quickly,” notes Emily Benson. However, a difficult choice for Washington, which “does not want to find itself under the yoke of rules set abroad”.
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