Details of Increased Tariffs between the EU and US
After the US implemented a 25% tariff on European steel and a 10% tariff on European aluminum back in June of 2018, the EU heavily contested the move but failed to reach any kind of agreement to lower them. As a result, the EU began implementing a series of retaliatory tariffs, escalating a brewing trade war between the two economic allies. These tariffs affected a series of consumer products, including American whiskey, motorcycles built in the US, peanut butter, and orange juice among others. These tariffs affected up to $7.78 billion worth of US exports and caused a massive strain on several business types.
Trade talks looked to be reaching a resolution in March of this year after the US suspended its own tariff on European whiskey, though it did not cause any meaningful changes from the EU.
Instead, the EU continued forward with even larger tariffs planned to go into effect this June. In fact, the EU was set to increase US whiskey and other export tariffs to 50%, which would have devastated the American whiskey business in Europe — a massive market for the product.
However, trade talks between the two economic powerhouses look to be resuming in earnest with clear intentions from both sides to resolve the remaining tariffs and issues.
EU Suspends Future Planned Tariffs
After months of stalled discussion, the EU recently announced that the planned increase for tariffs on US exports has been suspended. The move has reignited hopes for many business owners in affected industries, restoring the sentiment that a possible resolution could soon be agreed upon.
The EU and the US have reinforced that optimism by suggesting that the resumed trade talks should reach a resolution before the end of the year. This could make a massive economic difference for both democratic entities, especially as the COVID-19 pandemic begins to wane. The drop of tariffs between the US and EU could help both see an even greater economic recovery in 2021.
In a joint statement from US Trade Representative Katherine Tai, European Commission Executive Vice President Valdis Dombrovskis, and US Secretary of Commerce Gina Raimando, the three stated, “To ensure the most constructive environment for these joint efforts, they agreed to avoid changes on these issues that negatively affect bilateral trade. They committed engaging in these discussions expeditiously to find solutions before the end of the year that will demonstrate how the U.S. and EU can address excess capacity, ensure the long-term viability of our steel and aluminum industries, and strengthen our democratic alliance.”
About the Author
Tom Price is a writer focusing on Entertainment and Sports Features. He has a degree from NYU in English with a minor in Creative Writing. He has been previously published for Washington Square News, Dignitas, CBR, and Numbers on the Boards.