EU Parliament: US Should Drop Steel Tariffs, Section 232 Probes, Agree to Trade Framework Sunset
The U.S. should drop tariffs on EU steel from 50% to 15% and suspend Section 232 investigations targeting EU products as part of the two sides' trade framework announced in August (see 2508200052), said Bernd Lange, the chair of the EU Parliament’s Committee on International Trade. He also said the EU should work in a sunset provision that would end the agreement if the two sides haven’t made progress in 18 months.
Sign up for a free preview to unlock the rest of this article
Communications Daily is required reading for senior executives at top telecom corporations, law firms, lobbying organizations, associations and government agencies (including the FCC). Join them today!
Lange was speaking to the trade committee as it debated legislation proposed by the European Commission to codify the trade framework. Under that framework, the EU agreed to eliminate EU industrial tariffs on U.S. goods in exchange for the U.S. lowering tariffs on most EU goods to 15%, among other things.
Lange said he believes his changes to the trade framework are needed because the U.S. isn’t meeting its commitments, noting that the U.S. has failed to enact its promised tariff reductions (see 2509030068). He specifically pointed to the fact that the U.S. expanded the scope of its 50% steel and aluminum tariffs to include 407 new derivative products two weeks after the sides announced their trade framework in Scotland (see 2508150063).
“They are not really sticking to the deal,” Lange said. “And it is clearly, in my understanding, a breach of the spirit of the” agreement.
The U.S. should agree to lower tariffs on those 407 products back to the “baseline” 15% duty, Lange said, saying they are harming European exporters of windmills, motorcycles, agriculture technology and other machinery. If the U.S. retreats back to its 15% duty for those products, “then we will lift also our tariffs for the U.S. products of steel and products containing steel,” Lange said.
The U.S. should also agree to a "suspensions article” that would pause various Section 232 investigations and duties announced over the last several months, Lange said, including on heavy trucks (see 2510170044), machinery (see 2509240073) and semiconductors (see 2508150037). “I think we should make clear that we are willing to reduce [tariffs on] industrial goods from the United States to zero, but we expect from the United States that there's a standstill clause” for Section 232 probes, “and nothing will really go ahead above the 15%.”
Lange also said the EU should consider new safeguard measures on U.S. agricultural goods and said the bloc shouldn’t be cautious about using its anti-coercion instrument, which allows the EU to impose countermeasures against countries in response to measures that it deems qualify as economic coercion (see 2303280024).
He said the EU should push to include a sunset clause in the trade framework with the U.S. that would terminate the agreement if the two sides haven’t struck a more comprehensive deal within 18 months. “The whole exercise should be reflected in a reasonable time,” he said. “There is quite [a lot of] legal uncertainty about the background of the [U.S.] measures and so on, and nobody knows what will happen in the next year.”
EU Parliament members largely agreed with Lange’s recommendations. Karin Karlsbro from Sweden said there is a “need for a stronger suspension clause that addresses the issues arising” from U.S. Section 232 investigations. She also said Lange’s 18-month timeline is “ambitious,” but added that both a “clear timeline” and a sunset clause are “necessary.”
Anna Cavazzini said Lange’s recommendations are “absolutely in the right direction,” agreeing with Lange that U.S. steel tariffs and its Section 232 probes show that the U.S. doesn’t appear to be acting in good faith. “We see, at the moment, new investigations going on … from kitchen [products] to machinery and so on and so on,” she said. “I think we need to also, as European Parliament, give a very clear signal to the U.S. side that this is unacceptable. So why do we even have a deal when they, at the same time, continue investigating new tariffs?”
Martin Schirdewan said the deal is “built on sand.” All of Lange’s recommendations are “in the right direction, but it won't mean that this deal becomes any better,” he said through a translator. “There isn't any stability with a partner which is acting arbitrarily.”