US, EU agree on steel tariffs to help on climate change

Officials at G20 said cleaner steel and aluminium production is needed to tackle the climate crisis.

US President Joe Biden and European Commission's President Ursula von der Leyen agreed on steel and aluminium tariffs on the sidelines of the G20 summit in Rome [Kevin Lamarque/Reuters]

US President Joe Biden and European Commission head Ursula von der Leyen agreed to crack down on “dirty steel” and lift tariffs in a bid to curb carbon emissions and repair transatlantic relations.

In a joint appearance during the G20 summit in Rome on Sunday, the American and EU officials said the agreement represented a “new era”.

“By harnessing our diplomatic and economic power, we can reject the false idea that we can’t grow our economy and support American workers while tackling the climate crisis,” Biden said.

The US president said the agreement would not only avert punishing tariffs put in place by former President Donald Trump but lead to “cleaner” steel, lower inflation and badly needed improvements in snarled global supply chains.

Von der Leyen said the deal was “a major step forward in achieving climate neutrality” and a sign of a renewed agenda with the US.

“This marks a milestone in a renewed EU-US partnership,” von der Leyen said. “We have restored trust and communication.”

The two big economies committed to work together “to achieve the decarbonisation of the global steel and aluminium industries in the fight against climate change”, the European Commission said in a statement.

Steel and aluminium manufacturing are among the biggest carbon emitters globally.

Under the terms of the deal, “dirty steel” made in China will be restricted from accessing US and EU markets. China’s lack of environmental standards is part of what drives down its costs and is a major contributor to climate change.

All like-minded economies can participate, officials said.

The agreement also includes a partial lifting of tariffs that had poisoned trade links between Washington and Brussels since they were declared by the Trump administration.

Article 232 tariffs, as they are known, will not be removed entirely, but some quantity of European steel and aluminium will be allowed to enter the US tariff-free. In return for Europe dropping its retaliatory tariffs, the US will also ensure “that all steel entering the US via Europe is produced entirely in Europe”.

The Trump administration placed taxes on EU steel and aluminium in 2018, claiming the foreign products made by American allies were a threat to US national security.

European states and other allies responded by imposing counter-tariffs on US products, including motorcycles, bourbon, peanut butter, jeans and hundreds of other items.

The summit’s host, Italian Premier Mario Draghi, expressed “great satisfaction” over the tariff accord. The decision “confirms the further reinforcement under way of the already close transatlantic relations and the progressive overcoming of the protectionism of the last years”, he said in a statement.

Source: Al Jazeera and news agencies