The European Union and United States have agreed to halt their trade war, which was sparked by tariffs imposed under former President Donald Trump, to focus on holding nations that “support trade-distorting policies to account.”
The move was announced in a joint statement on Monday after the European Commission said it would not proceed with a planned set of retaliatory tariffs for six months to allow the two sides to address shared concerns which had led to the trade dispute.
Explaining the decision, the EU and US stated that, as allies, halting their trade war can allow them to focus on jointly promoting high standards globally, and fighting back against “countries like China that support trade-distorting policies.”
The ‘truce’ has averted potential embarrassment for President Joe Biden by preventing tariffs from being imposed on American companies by the European bloc one month before he visits Brussels.
However, the head of the European Parliament’s trade committee, Bernd Lange, has warned the White House that Biden will have to bring a “tangible commitment to reciprocate the EU gesture” during the Brussels-Washington DC summit, or the commission could push ahead with introducing the retaliatory measures.
Currently, the US has placed 25% tariffs on steel and 10% on aluminum from the EU, a measure also applied to China, India, Norway, Russia, Switzerland, and Turkey. The Trump administration claimed it was necessary to take that step on national security grounds – claims which the EU rejected.
If Washington fails to lift its tariffs at the upcoming bilateral meeting, the EU has threatened to respond by imposing similar rules on US goods and increasing duties on items such as bourbon, motorbikes, and motorboats to 50%.
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