Report: US EU Steel Talks Stuck

U.S.-EU talks on a 'green steel' trade deal are stalling, with a critical October 31 deadline approaching, Reuters reports. Central to the dispute are differing strategies to address carbon emissions and excess production, largely targeting China's steel industry dominance.  

Bloomberg reports The US and European Union continue work on an agreement that would introduce new tariffs aimed at excess steel production from China and other countries, as well as put behind them a Trump-era trade conflict.  

The levies would primarily be focused on imports from China that benefit from non-market practices, according to people familiar with the discussions, who said talks were ongoing.

Initiated in 2021, these negotiations aimed to replace the contentious Section 232 tariffs with the Global Arrangement for Sustainable Steel and Aluminum, designed to create trade barriers against high-carbon imports, particularly from China. However, progress has been slow, with concerns mounting that the deadline might pass without significant advancements.

A key stumbling block is the EU's Carbon Border Adjustment Mechanism (CBAM), a policy proposing standardized carbon pricing and mandatory purchase of credits for importing carbon-intensive goods. This approach, vital to the EU's climate strategy, faces U.S. opposition due to potential WTO non-compliance and necessitates a parallel U.S. policy shift, currently seen as politically untenable given the current Congress dynamics.

An extension of the deadline threatens to drag the talks into the turbulent 2024 election year, complicating negotiations amidst strong tariff maintenance sentiments. Despite the U.S. Trade Representative's office withholding comments, the European Commission asserts its dedication to forging a pact by October, with EU trade chief Valdis Dombrovskis emphasizing the critical nature of meeting the deadline and permanently revoking the Section 232 tariffs.