US and EU Narrow Focus of Green Steel Trade Talks Amid Regulatory Differences

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The United States and the European Union have been in negotiations for two years to foster environmentally friendly steel and aluminum trade. However, the U.S.’s initial broader vision has been scaled back due to European objections citing violation of fair trade rules, according to information released on Tuesday.

The Biden administration is now targeting dirtier steel imports from countries like China, which are heavily subsidized by their governments. If no resolution is reached, Trump-era tariffs on European steel and aluminum may be reinstated. This issue is expected to be a key topic at an upcoming summit between President Biden and European Commission President Ursula von der Leyen.

The U.S. and Europe have differing views on how to tackle climate change. Europe advocates for a carbon pricing scheme that the U.S., under pressure from labor unions, finds unviable. While the U.S. sees China as a major competitor due to its subsidized steel industry, Europe maintains a more business-friendly stance despite growing skepticism.

Previous attempts at trade agreements like the Obama-era trade deal have been unsuccessful due to differences in regulatory views and strained U.S.-Europe relations. Despite these challenges, the National Security Council remains optimistic about the negotiations, particularly given the forthcoming meeting between Biden and von der Leyen, as well as the close alignment and warm relations between U.S. Trade Representative Katherine Tai and her counterpart, Valdis Dombrovskis.


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