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U.S. announces deal with European Union to ease steel and aluminum tariffs enacted under Trump

In this Tuesday, Sept. 28, 2021, photo Commerce Secretary Gina Raimondo speaks at The Economic Club of Washington. As President Joe Biden's de facto tech minister, Raimondo is tasked with ensuring the United States will be the world leader in computer chips. But there is a global shortage, creating a drag on growth and fueling inflation on the cusp of the 2022 elections. Raimondo is working to increase production of chips as well as solar panels and batteries to help the United States thrive. (AP Photo/Alex Brandon)

ROME – The Biden administration has struck a deal with European Union officials to lift some tariffs on steel and aluminum imports, resolving at this year’s Group of 20 summit a bitter trade stand-off that began under president Donald Trump three years ago.

The deal announced Saturday allows “limited volumes” of steel and aluminum products from the EU to enter the United States tariff-free, Commerce Secretary Gina Raimondo said.

Even as supply lines strain, Biden is in no rush to scrap Trump’s steel tariffs

In return, the European Union will drop their retaliatory tariffs on American goods. The EU had been poised on Dec. 1 to boost tariffs to 50 percent on various U.S. products, including Harley-Davidson motorcycles and bourbon from Kentucky.

“This agreement is significant in that it will reduce costs for American manufacturers and consumers,” Raimondo said.

Biden officials have faced a difficult task in deciding how or whether to unwind Trump’s duties on foreign imports, which were panned by many economists as raising prices for American consumers but in many cases were cheered by labor groups powerful among Democrats for shielding industry groups from foreign competition.

Administration officials said they expect the tariff agreement to help alleviate the current supply chain issues that are currently hampering manufacturing and distribution of key goods throughout the United States. It also will help ensure that all steel entering the United States from Europe will be made entirely on the continent, according to the administration.

It also calls on future negotiations to take “carbon intensity” levels in steel and aluminum into account in future trade talks, which Raimondo said would allow production of products that are “significantly cleaner” than steel and aluminum produced in China.

President Biden spoke to reporters at the Group of 20 summit in Rome on Oct. 31. (Video: The Washington Post)

White House national security adviser Jake Sullivan said the tariff agreement removes “one of the largest bilateral irritants in the U.S.-E.U. relationship.”

Some experts said the measure is coming dispiritingly late given how long Biden has president and the high prices on many goods roiling the U.S. economy.

“I’m surprised it took this long. Trump put that on, it seemed, in a pique of anger with no obvious logic and it seemed easy to do to take it off. We’re eight, nine, months into his term of office,” said Dean Baker, a liberal economist. “It raises the prices at a time we’re having these supply chain problems.”

But the administration has been reluctant to antagonize the steel industry and other domestic producers protected by the tariffs.

In the electorally crucial state of Pennsylvania, for instance, the administration faces strong political pressure to maintain the tariffs on behalf of state steelworkers. An analysis by the Economic Policy Institute, a left-leaning think-tank, found that the tariffs created more than 3,000 steelmaking jobs. Raimondo this month said the tariffs “helped save American jobs in the steel and aluminum industries."

In a sign that the tariffs may , the American Iron and Steel institute praised Raimondo and U.S. Trade Representative Katherine Tai for maintaining enough of the tariff to “prevent another steel import surge that would undermine our industry and destroy good paying American jobs.”

The United States Steelworkers also released a statement on Saturday praising the agreement.

“We appreciate the Biden administration’s continued recognition that the American steel industry is critical to our national and economic security," said Kevin Dempsey, president and CEO of the American Iron and Steel Institute in a statement.