Agreement, which is centered around steel and aluminum, will also lift 25% tariffs on American exports
The American Farm Bureau Federation (AFBF) is welcoming the news from U.S. President Joe Biden that the U.S. and European Union have agreed to end a tariff dispute.
The trade deal, which mainly focuses on steel and aluminum, will also lift retaliatory tariffs that affected many U.S. agricultural products.
“The United States and the European Union have agreed to negotiate the world’s first trade agreement based on how much carbon is in a product, as we negotiated the steel and aluminum tariffs that were in place,” Biden said in announcing the agreement on October 31.
The deal means Section 232 tariffs will be replaced with a tariff rate quota under Section 232, and the EU has agreed to lift its 25% retaliatory tariffs on American exports, including agricultural products.
“The deal will immediately remove a point of significant tension with our friends in the European Union,” Biden said.
“Today’s agreement between the United States and the European Union is welcome news for America’s farmers. While the dispute centered around steel and aluminum, farmers were swept up in the turmoil as the EU clamped down on U.S. agricultural exports like orange juice, butter, cheese, pork, nuts and many more. It’s crucial that we now restore those trade relationships,” Duvall said in a statement. “As we continue to recover from the impact of the global pandemic, America’s farmers need the stability and predictability of strong trade agreements to grow exports and provide healthy, affordable food to our international neighbors.”
Under the new trade deal, the EU will be allowed to ship 3.3 million metric tons of steel per year to the U.S. duty free, but any amount beyond that will be subject to a 25% tariff. Previously, there was a blanket 25% tariff on European steel and a 10% tariff on aluminum.
The change is meant to address the high carbon emissions created by the steel and aluminum industries.
“This marks a milestone in the renewed EU-U.S. partnership. And it is our global first in our efforts to achieve the decarbonization of the global steel production and trade,” said European Commission President Ursula von der Leyen during the announcement with Biden. “It is a big step forward in fighting climate change. The arrangement is, of course, open to all likeminded partners. Steel manufacturing is one of the highest carbon emission sources globally.”