Biden has long had to show that, unlike Trump, he values allies
The trade skirmish between the United States and the European Union hurts its anti-Chinese front. Washington and Brussels have agreed to a partial ceasefire to prevent the dispute over the Donald Trump-era steel levies from getting worse. Rockier relations with Beijing make both sides need each other’s support. The elimination of the tariffs would help them in their main fight.
The detente announced on Monday falls short. The EU said it will defer doubling tariffs to 50% on US products such as Kentucky bourbon and Harley-Davidson motorcycles. Those taxes were the response to Trump’s imposition of steel tariffs, both on his rivals and his allies, in an attempt in 2018 to stem the flood of cheap steel from China. Instead, the EU and the US will hold talks about overcapacity and Beijing’s “trade distortion policies”.
American producers have suffered. Since the tariffs were imposed, US whiskey exports to the EU have fallen by almost 40%, and those to the UK by more than 50%, according to US lawmakers. Harley-Davidson, which said last year it was cutting 700 jobs, moved some of its production from the United States to Thailand.
Meanwhile, the so-called phase one trade deal between the United States and China is lagging behind. In a pact signed in January 2020, Beijing pledged to buy an additional $ 200 billion worth of American goods over two years. But last year the People’s Republic only achieved 58% of that commitment, according to the Peterson Institute for International Economics.
An investment agreement between the EU and China is also in shaky ground. Earlier this month, the European Commission suspended efforts to ratify the pact following sanctions related to criticism of China’s treatment of Uighur minorities.
It’s true that Joe Biden has a political calculus to make, as the American steel industry is located in voter-rich Rust Belt states like Pennsylvania. But the sector only gained 1,100 jobs from 2018 to 2020, according to the Labor Department. Meanwhile, 75,000 manufacturing jobs were lost due to rising steel prices, according to a 2019 Federal Reserve study.
Biden has long had to show that, unlike Trump, he values allies. Removing US steel tariffs on the EU would allow both sides to focus on their shared efforts against China. It is a trade worth doing.