WASHINGTON—On Thursday, the Biden administration extended the temporary suspension of Trump-era tariffs on European steel and aluminum for an additional two years, underscoring the president’s ongoing struggles in resolving trade tensions as the approaching election year adds complexity.
Despite more than two years of negotiations between Washington and Brussels, a permanent solution to eliminate the tariffs remains elusive. The administration’s decision means that the temporary import quota system, introduced as a replacement for the Trump-era tariffs, will persist during ongoing talks. The European Union has expressed dissatisfaction with this interim arrangement, highlighting its vulnerability to potential reversal if Biden is not re-elected.
The extension prevents the reinstatement of import duties (25% on steel and 10% on aluminum), averting retaliatory tariffs from the EU on American products like Bourbon whiskey and Harley-Davidson motorcycles.
As the 2024 elections approach, the administration has faced challenges in securing anticipated agreements with Asian and European allies on various trade issues. Recent setbacks include the collapse of talks on digital services rules with Asia-Pacific nations in November and stalled efforts to enhance the EU’s access to the U.S. electric-vehicle market.
These breakdowns underscore how domestic politics are increasingly influencing Washington’s international economic relations, leading to a potential paralysis in trade negotiations as the election draws near.
The administration’s attempts to unwind Trump’s tariffs face opposition from pro-tariff labor unions crucial for Biden’s re-election. Former President Trump has signaled a return to his America First trade policy if re-elected, potentially undermining Biden’s efforts to foster trade with allies.
Proposed progressive standards in Biden’s trade initiatives, especially regarding labor and the environment, have deterred trading partners in Asia and Europe. Efforts to reach agreements on critical minerals and batteries for electric vehicles have faltered, contributing to the impasse in trade negotiations.
Despite these challenges, the Biden administration has improved relations with allied governments, particularly the EU, with some agreements reached, such as a trade and investment deal with Taiwan and an agreement with Japan on critical minerals for electric vehicles.
The lack of progress in Biden’s new trade initiatives and unresolved disputes from the Trump era have frustrated business sector representatives and centrist lawmakers. Concerns are growing about the administration’s recent withdrawal from discussions on digital trade rules, with fears that China could set the rules of engagement in the absence of U.S. participation.
The failure to reach an agreement on European steel and aluminum comes after more than two years of efforts to promote global trade in metals using environmentally friendly methods. Fundamental differences between the U.S. and the EU on issues like carbon pricing and adherence to international trade rules persist.
EU officials insist on the permanent removal of Trump-era tariffs, deeming them illegal, while the U.S. maintains the import quota system to limit European metal imports. The EU has pledged not to impose countertariffs until after the 2024 election.
U.S. Trade Representative Katherine Tai stated that the extension allows for continued negotiations on the global trade arrangement, emphasizing the importance of maintaining viable steel and aluminum production for U.S. national security. However, challenges persist, and the delicate policy surrounding tariffs remains a complex issue.