The 25% tariffs on steel and aluminum announced by President Trump earlier this year shocked the world – even those within the steel industry – and were viewed as a drastic measure by the European Union, who retaliated in what has been an escalating trade war.
But after a meeting between the Trump administration and EU leadership, there may be resolution in the near future.
Speaking in the Rose Garden at the White House, President Trump said, “We also will resolve the steel and aluminum tariff issues, and we will resolve retaliatory tariffs. We have some tariffs that are retaliatory. And that will get resolved as a part of what we’re doing.”
The agreement in principle is a part of what the Trump administration has called a “new phase” in the relationship between the U.S. and the European Union, with the ultimate goal being “zero tariffs” on industrial goods, which would include steel.
More specific details haven’t emerged since the announcement at the end of July, but the idea that escalating tariffs are on hold for the moment amid negotiations wards off fears of a trade war spiralling out of control. Stocks on Wall Street rose following the announcement as many finance experts were fearful of what impact future tariffs could have on the U.S. economy.
Those in the steel industry have had mixed feelings about the steel tariffs, but many have been pleased at positive results – better prices for steelmakers and the reopening of previously-closed or closing plants. The U.S. exports between 6 and 8 million metric tons of steel each year, on average, primarily to Canada and Mexico.
While domestic steelmakers don’t export a lot of steel to the European Union, they do supply most of their steel to manufacturers who export a large volume of finished products to the EU. Therefore, escalation would impact the manufacturers and their suppliers, the chief of which is the U.S. steel industry.
As negotiations continue, more details about the agreement will emerge. For the time being, it appears that the downward trade war spiral has been put on pause while the two parties work out their disagreements on the international stage.