Recent reports told us that the European Union was considering a compromise to finally end what remains of Trump's trade war with Europe by accepting quotas on exports of metal beyond an undetermined threshold. And while that would not be ideal, such a move would allow both sides to save face for a much smaller price than continuing or escalating the war.
Now, not coincidentally, Politico reports that European officials are ready to make a deal in the coming days and that coincides with President Biden's trip to Europe.
The contours of a deal now appear to be forming around Europe accepting tariff rate quotas. This would secure an immediate removal of the Trump-era tariffs but would mean that high duties on European metal would kick in again if EU exports surpassed a certain level. EU officials had regarded these kinds of measures as blackmail under Trump, but are now accepting there may be no other way out of the standoff.
In a meeting with trade diplomats on Thursday, the European Commission was optimistic that a deal could be reached, two people in the meeting said. But diplomats did not receive more details of any future settlement, as the Commission does not want to undermine the negotiations with Washington.
In addition to Biden's trip to Europe, a Monday deadline of November 1st for either imposing further tariffs or reaching a settlement is increasing pressure on both sides to accept a compromise.
I would be very surprised if Biden returns home without a deal and, once a deal is reached, the Biden administration can turn all of their attention toward either ending or deescalating Trump's trade war with China and other countries.
It's not the sole or even the biggest reason, but lingering trade wars are one reason why the price of virtually everything has increased. Free trade reduces inflation.