Donald Trump has created mighty ripples in the international scene before he stepped down. One such ripple was in international trade.
The main weapon he used to pursue his America First policy was tariffs. He wanted to reduce the trade deficit and convert every multilateral trade agreement into a bilateral trade agreement, with emphasis on the USA.
Starting from 2018 it was first imposed on major countries from which America imported, such as Canada. Then it extended towards EU states. Then when it reached China, it became a full-blown trade war. These tariffs are now called Trump tariffs.
From 2019 onwards tariffs were being lifted gradually because of retaliatory policies of the countries that faced tariff increases. It even caused an economic crisis domestically. It even severely affected the performance of Trump and his party candidates.
His successor Joe Biden, is now repairing what is now broken by Trump. One of such is the easing of tariffs imposed on steel and aluminium from EU states.
According to Valdis Dombrovskis, EU trade commissioner, both have agreed with the US to stop the steel and aluminium trade dispute and launch cooperation on a Global Arrangement on Sustainable Steel and Aluminium.
He said that more details will be released soon.
This agreement was the result of months of discussion between the US and EU. By this agreement tariff rate quotas will be placed on the metal and aluminium reducing their levies. It was done before retaliatory tariffs from the EU were to be increased.
It was announced during the G20 summit in Rome, with a focus on reducing global emissions, Chinese overcapacity in the sector, and at the same time also easing supply chain bottlenecks in the metal industry.
The US and EU have also suspended trade-related disputes presented in WTO. They will analyze both of their markets on how much their market can handle in import and export.
They will also make sure such products from outside the market will not leak into this low tariff market. They are hinting at the Chinese metals, which are overproduced and might leak into this tax-free market.
The EU faced a lot of pressure from the steelmakers to lift the tariffs. They are even hopeful that the US will allow steel and aluminium in pre-tariff numbers.
Another factor that gives hope to this agreement is that it resembles successful negotiations signed between Canada and Mexico.
Even in the US, there is a positive reception of the news. They hope for the proper implementation of such quotas.
Another US sector that is excited with this news is the spirit producers, as they ready themselves to return to the European market.
Even the senators are on board with the decision, especially in light of recent supply chain disruptions, and economic crisis that just whizzed past them, anti-Chinese policy, their overproduction of iron, and climate change.
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