The European Union and the United States have reached an agreement to limit tariffs dating back to the Trump administration, officials said on Saturday.

More and more European-made steel will enter the United States while the EU will tax motorcycles, bourbon whiskey, peanut butter and jeans at just 25% instead of the proposed 50%.

President Joe Biden’s latest move, announced while at the G20 in Rome, eases trade tensions created by ex-President Donald Trump in 2018.

What effect will the agreement have?

The White House and EU Trade Commissioner Valdis Dombrovskis confirmed Saturday’s deal to “put a stop to” the dispute. Dombrovskis tweeted that the trade deal would be officially announced on Sunday by Biden and European Commission President Ursula von der Leyen.

The deal would ensure that “all steel entering the United States via Europe is produced entirely in Europe,” added US Secretary of Commerce Gina Raimondo. This would prevent Chinese subsidized steel from being processed in Europe before being sent to the United States.

US-made bourbon whiskey price could now drop under new deal

Although US officials did not specify how much steel would be imported from the EU, sources told Reuters news agency that annual volumes above 3.3 million tonnes would be subject to tariffs. customs.

European Union leaders temporarily suspended plans in June to increase taxes on products made in the United States like bourbon, motorcycles, jeans, peanut butter and bourbon.

The new deal means the EU will tax US whiskey and other products at 25% of its import cost instead of the 50% originally planned.

How did the trade dispute start?

Trump introduced the EU’s special steel and aluminum tariffs in 2018 under Section 232 of the U.S. Constitution, claiming that foreign products pose a threat to national security.

European steel and aluminum producers have suffered from tariffs imposed by Washington, while tripling the cost of steel in the United States over the past year to over $ 1,900 (€1643).

The EU saw it as a measure to protect the US economy from unwanted competition and took the matter to the World Trade Organization. The case has now been withdrawn.

The European Commission retaliated by imposing tariffs on American products which were due to increase before the end of the year, Raimundo explained. This last agreement made it possible to avoid this increase.

Both parties had set a December deadline to avoid tax hikes.

In June, President Biden helped resolve a 17-year dispute over government aid to Boeing and Airbus aircraft makers while making a pact against Russia and China.

jc / aw (Reuters, AP, dpa)

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