The European Commission is expected to announce it is renewing a trade truce with Washington on Monday, a European official with knowledge of the schedule told POLITICO.
EU countries threw their weight on Wednesday behind the Commission's plans to extend a pause on retaliatory tariffs on approximately $6 billion worth of American exports from January 1, two European diplomats said.
The EU and the U.S. have been racing to find an agreement to prevent tariffs on billions of dollars of trade kicking in on both sides of the Atlantic to resolve a steel and aluminum dispute dating back to 2018 triggered by former U.S. President Donald Trump. The tariffs were suspended two years ago by the Biden administration while Brussels and Washington sought a new "global arrangement" on steel aimed at reducing global carbon emissions and excess capacity.
The diplomats, granted anonymity to speak on the sensitive issue, said that the tariffs truce will extend from January 1 and will last for 15 months. This means European tariffs on American products such as whiskey and motorbikes will be paused until the end of March 2025, shortly after the next U.S. administration takes office in the White House.
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In an interview published Friday, EU trade chief Valdis Dombrovskis told the Financial Times that Brussels considered extending the trade truce, since there's no solution yet to the broader steel agreement.
U.S. President Joe Biden also would have to issue a new executive order to delay the reimposition of a 25 percent tariff on EU steel and a 10 percent tariff on EU aluminum, and it's not clear yet how soon that will happen.
In the latest stretch of talks, Brussels had been adamant it wanted to improve the tariff-rate quota (TRQ) arrangement agreed two years ago. But one European diplomat said the terms were not improved, despite complaints in Europe that the TRQs were cumbersome to implement across EU countries.
The 2021 deal established three separate annual tariff-rate quotas for the European Union that allowed a certain amount of product to enter the U.S. on a duty-free basis before Trump’s 25 percent tariff on steel and 10 percent tariff on aluminum kicked in.
The TRQs, which all expire on December 31, were set at 3.3 million metric tons for steel; 366,040 metric tons for semi-finished wrought aluminum; and 18,000 metric tons for unwrought aluminum.