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Business groups on both sides of Atlantic urge end to EU retaliatory tariffs on US

Eighty-seven business associations from sectors such as apparel, food and drink and manufacturing from both sides of the Atlantic are calling on the European Union and United States to prevent the reintroduction of EU retaliatory tariffs on US products worth €1.3 billion come January next year.

The move comes as Washington and Brussels are wrangling over the terms of an extension of a tariff truce agreed in October 2021 when the US transformed steel and aluminium tariffs into quotas and the EU lifted sweeping tariffs on iconic US exports such as Harley Davidson motorbikes and Bourbon whisky dating back to the Trump administration.

The truce was meant to leave time for the two sides to find a long-term settlement for a return to tariff-and-quota-free trade in the steel sector by agreeing on terms for carbon-neutral and market based production. Negotiations over this Global Arrangement on Sustainable Steel failed late October. The EU now needs a positive Council decision to avoid tariffs kicking back in automatically on the first day of 2024.

“The prospect of the return and increase of retaliatory tariffs in the steel and aluminium dispute, barely a month away, is causing unbearable uncertainty and instability for unrelated sectors,” the associations said.

In a separate development, seventeen US senators wrote to US Trade Representative Katherine Tai on Tuesday (5 December) requesting an “expedited agreement’ with the EU to “secure the permanent removal of retaliatory tariffs on spirits and wines”.

Additional transatlantic tariffs could also be reintroduced in June 2026 if the two sides fail to find a solution to resolve the long-running Airbus-Boeing dispute.

EU wants changes to US steel and aluminium quotas

As part of the steel and aluminium negotiations, the EU is insisting that the US agree to simplify its current tariff rate quota system for imports of EU steel and aluminium.

Brussels is also calling for the TRQ system to be reformed from the current system of 27 separate tariff rate quotas – one per EU member state – to an EU-wide quota.

Brussels also wants the number of product categories subject to the US quotas to be reduced from the current figure of 54 to simplify the system.

Last week European Commission executive vice president Valdis Dombrovskis said that negotiations in the “next couple of days” will be focused on improving the management of the TRQs “before coming to conclusions on possible actions”.

A commission spokesperson told Borderlex this week that “outreach to the US is ongoing”. Member state trade officials are also meeting today in Brussels to discuss EU-US trade relations.

The Council must decide by the end of the month on the basis of a proposal from the commission whether to extend the current suspension of EU counterbalancing measures.

Call to remove “debilitating” tariffs for sectors not related to disputes

The industry groups urge Brussels and Washington to permanently remove the “debilitating” tariffs on sectors which are unrelated to the steel, aluminium, and aircraft industries.

“Between 2018 and 2021, our industries and supply chains were severely impacted by the imposition of tariffs in disputes wholly unrelated to our sectors,” said the business groups today.

“If the permanent removal of tariffs on sectors unrelated to the disputes is not possible at this time, a further suspension of duties in the steel and aluminium dispute is necessary and should be announced without delay,” says the statement.

“The suspension should be long enough to provide affected sectors with long-term predictability,” according to the business associations.

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