US and EU agree to steel tariffs reductions. This will aid in climate change mitigation

Sunday's announcement by President Joe Biden that a new U.S.-EU trade agreement would curb "dirty" steel that emits carbon dioxide that is blamed for climate changes and patch up the trans-Atlantic divide over Trump-era aluminum and steel tariffs was made clear by Biden.

US and EU agree to steel tariffs reductions. This will aid in climate change mitigation

Biden and Ursula von der Leyen, President of the European Commission, stated that the agreement was a renewed partnership in economic and environmental issues. The trade agreement would resolve the dispute over steel market excesses and provide a framework to reduce carbon-intensity and aluminum production, which contributes to global warming.

The U.S. president stated that "dirty Steel" from China would be prohibited from accessing their markets. However, all other like-minded countries could join the agreement.

Biden stated that the United States can overcome the myth that it can't grow its economy and support American workers, while simultaneously tackling climate change. He has been pressing the U.S. to address climate change aggressively. Biden will also attend a major U.N. conference on climate change this week in Glasgow.

As they discussed the deal, Von der Leyen smiled at Biden and called him "dear Joe", which was an indication that the U.S. president had made significant progress in repairing relations between Europe and the United States after the Trump years.

She said that "it will be a significant step forward in achieving temperature neutrality and it'll ensure a level playing ground", adding that the agreement was part a renewed, forward-looking agenda for the U.S.

U.S. trade representative Katherine Tai, U.S. commerce secretary Gina Raimondo and Jake Sullivan, the U.S. national defense adviser, announced the agreement in Rome on Saturday. The Article 232 tariffs as they are commonly known would not be completely removed, but some European steel and aluminum will be allowed into the U.S. without tariffs.

Raimondo stated that in return for Europe dropping its retaliatory duties, the U.S. would ensure that all steel coming into the U.S. via Europe was produced entirely in Europe.

The removal of tariffs is an important step towards resolving Donald Trump's legacy as president. Biden tried to reset U.S. relations in Europe.

Trump's administration had imposed taxes on EU steel, and aluminum in 2018, claiming that foreign products made by American allies were a danger to U.S. security.

Europeans and allies were furious at Trump's use Article 232 of U.S. Trade Law to justify tariffs. Many imposed counter-tariffs on U.S. made motorcycles, bourbons, peanut butter, jeans, and hundreds more.

This back-and-forth caused harm to European producers as well as raising steel prices for American businesses. Trump's goal of creating steel mill jobs was not achieved by the tariffs. According to the Bureau of Labor Statistics, jobs in primary metals manufacturing did increase slightly, reaching as high as 389,100 by 2019. However, mills lost workers during the pandemic and the sector's employment is about half what it was in 1990.

In May, the European Union took steps to improve relations. The EU temporarily stopped planned increases due to retaliatory tariffs. The EU temporarily suspended planned increases to the European whiskey tax, which was originally set at 50%. Both sides had to meet a December deadline in order to avoid the higher rate of tax.

In a statement Saturday night, Mario Draghi, the Italian Premier, expressed his "great satisfaction" with the agreement. He said that the decision "confirms further reinforcement underway trans-Atlantic relationships and the progressive overcoming the protectionism from the last years."

Chris Swonger, president of Distilled Spirits Council of the United States and CEO, welcomed the announcement after "three very difficult years of American whiskey exports."

Swonger stated that lifting the tariff burden on American whiskeys does more than boost U.S. distillers, farmers, and it also supports recovery of EU restaurants and bars, as well as distilleries and distilleries affected by the pandemic.

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