Trade

US, EU Discussing End to Trump’s Trade War

SK Ashby
Written by SK Ashby

The United States and the European Union have suspended their tariffs and corresponding retaliatory tariffs stemming from the 16-year-old dispute between Airbus and Boeing, the world's two largest Aerospace companies, but Trump's tariffs on steel and aluminum are still on the books.

According to Politico, the two sides are now considering a compromise to end Trump's tariffs on metal that would include setting a quota for imports rather than imposing tariffs on all imports.

“Everybody wants this to go away because it’s a leftover from Trump and stands in the way of better EU-U.S. relations,” one EU trade diplomat said, capturing the overall mood of suing for peace in Brussels. The backdrop to the conciliatory tone is a new diplomatic format — the Trade and Tech Council — where Washington and Brussels are trying to put the antagonism of the Trump era behind them to cooperate in areas such as robotics, microchips and artificial intelligence. Its first session was held on September 29. [...]

Brussels also understands the pressure Biden is facing from the steel industry, unions and a part of his party, especially ahead of the upcoming midterm elections.

“Obviously there are very difficult questions, importantly, what you can actually do — and here I’m speaking a little bit like an American — to keep your steel industry, or your building industry, alive in the face of this overcapacity and not at the same time penalize the Europeans,” Rupert Schlegelmilch, who handles EU-U.S. relations at the European Commission’s trade department, said at a recent event.

Ideally, there would be no tariffs and no quotas, but key constituencies of the Democratic party require their pound of flesh even if the flesh is laced with poison.

The point at which the self-interest of predominately white labor unions in the Midwest becomes detrimental to international relations and the entire economy is the point at which they lose me, but I digress. At the end of the day, they are doing what they were created to do and it's up to the Biden administration to balance their interests with greater interests for everyone else.

I don't envy the White House. Their job in this situation is to find the outcome that upsets the least number of parties but it's encouraging that European diplomats understand the political pressures the Biden administration is dealing with.

If Trump's tariffs on European metal are suspended, that will be the end of his trade war with Europe.