EU and US Forge Metals Alliance Against Chinese Subsidies

The European Union and the United States are establishing a metals alliance to counter the effects of subsidized Chinese production. The trade deal will offer EU metal makers tariff rate quotas, replacing previous tariffs. This aims to address overcapacity and protect their markets from Chinese influence.

The European Union and the United States are joining forces to form a metals alliance aimed at mitigating the impact of subsidized Chinese production on global markets, EU Trade Commissioner Maros Sefcovic announced on Monday. The decision follows extensive discussions revealing that both U.S. and EU steel industries face similar challenges.

Under the new trade deal, EU steel and aluminium producers will benefit from a quota system featuring minimal or zero tariffs, replacing the 50% import tariffs previously imposed by former U.S. President Donald Trump. This agreement, as described by Sefcovic, is a 'clear prospect of joint action' on metals, setting up a protective framework through tariff rate quotas.

The urgency for bolstering the EU-U.S. trade relationship is heightened as Europe seeks to retain its scrap supplies, a vital resource for smelters. The planned alliance underscores a coordinated effort at the G7 level to address economic imbalances, largely attributed to Chinese overcapacity and subsidies, which remain contentious issues between the EU and China.

(With inputs from agencies.)