U.S. and Europe Search for Tariff Stop-Fireplace as Biden Heads Abroad

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WASHINGTON – The United States and the European Union are working towards an agreement that would settle longstanding disputes over aircraft subsidies and metal tariffs that sparked a trade war during the Trump administration as President Biden seeks to reunite with traditional American allies.

The two sides hope to reach an agreement by mid-July aiming to lift the tariffs that both governments have imposed on each other’s goods by December 1, according to a joint statement made ahead of the US-EU summit it is written that Mr Biden will attend next week in Brussels.

Resolving trade tensions with Europe and other allies is a major goal of the Biden administration, which seeks to repair the broken relationship under President Donald J. Trump, whose provocative approach to trade policy has included the punishment of tariffs. Mr Biden and other government officials have stated that they want to rebuild those relationships, in part so that the United States can work with allies to counter China and Russia.

The joint statement indicated the eagerness on both sides of the Atlantic to end a trade war that has resulted in tariffs on a variety of goods – including American peanut butter, orange juice and whiskey, and taxes on European wine and cheese.

“We pledge to make every effort to find comprehensive and lasting solutions to our trade disputes and to avoid further retaliation that weighs on transatlantic trade,” the document says.

The draft was previously reported by Bloomberg News.

The desire to reach an agreement arose when Mr Biden left for a summit in Britain on Wednesday with the leaders of the Group of 7 Nations, his first international trip as President.

When he boarded Air Force One, he stated that his priority was to improve relationships with his colleagues.

“Strengthen the alliance and make it clear to Putin and China that Europe and the US are close and that the G7 will move,” said Biden of his goals for the trip.

Discussions about easing tariffs come at a critical time for the global economy as countries emerge from the pandemic. The widespread scarcity of raw materials due to supply chain bottlenecks and growing consumer demand have pushed prices up and worried policymakers.

In March, the United States and the European Union agreed to temporarily suspend tariffs on each other’s planes, wine, groceries and other billions of dollars as both sides seek a negotiated solution to a dispute over the two leading aircraft manufacturers.

In two parallel disputes that began nearly two decades ago, the World Trade Organization authorized both the US and Europe to impose tariffs on one another in order to obtain government subsidies to Airbus and Boeing. The European Union imposed tariffs on US products worth around $ 4 billion, while the United States imposed tariffs on European goods worth $ 7.5 billion.

The two governments are also trying to resolve a dispute over the steel and aluminum tariffs that Trump imposed in 2018. The 25 percent tariffs on imports of European steel and 10 percent on aluminum sparked retaliation from Europe, which imposed similar tariffs on American products such as bourbon, orange juice, jeans and motorcycles.

Negotiations take place as the United States broadly revises its trade policy with a new focus on multilateralism.

Last week, the Biden government suspended retaliatory tariffs on European countries in response to the taxes on digital services it imposed in the course of negotiations for a broader tax treaty.

As part of the effort to deepen relations, the United States and the European Union plan to establish a Trade and Technology Council to expand investment and prevent new disputes from arising. She will also focus on strengthening supply chains for critical technologies like semiconductors, which have been in short supply over the past year.

The alliance is another tool the government is using to drive back China’s growing economic influence, which Mr Biden has repeatedly identified as a threat to the United States. While the president has so far avoided hitting China with new tariffs, he has yet to abolish the levies Trump has imposed on Chinese goods valued at $ 360 billion. Last week the government banned Americans from investing in Chinese companies affiliated with the country’s military or selling surveillance technology used to suppress deviant or religious minorities.

The draft document states: “We intend to consult closely and cooperate on all issues within the framework of our respective, similarly complex approaches for China.”

The US-EU summit will take place next Tuesday.

Matina Stevis-Gridneff contributed the reporting from Brussels.