The U.S. and U.K. ended a four-year tariff tiff yesterday that mostly applied to trade industrials like aluminum and steel. The two leading nations pledged to work together to also undermine China’s trade policies, which many officials claim are unfair and stringent. The tariff agreement also reduces international import duties on products like motorcycles, whiskey, and other consumer goods.
At a glance
- The United States and the United Kingdom eliminated tariffs on steel and aluminum in an effort to bolster trade and combat Chinese influence over industrials markets
- The deal also eliminates the retaliatory tariffs that the U.K. placed on American-made products like motorcycles and jeans
- President Trump issued the tariffs in 2018 to protect consumers from subsidized imports
U.S. Commerce Secretary Gina Raimondo and U.S. Trade Representative Katherine Tai said the deal with the U.K. would protect steel and aluminum companies and workers, Reuters reports. The deal will also alleviate tensions in order to free up resources to compete with China, which currently exports the most steel in the world by a significant margin.
Raimondo also said that the cuts would help ease inflationary pricing in the U.S., which hit the highest marks in four decades this year. Prices, of course, will never return to lower levels; the idea of “easing inflation” only pertains to future price increases.
The U.S. and U.K. trade deal includes language to lessen Chinese influence
The terms of the deal outline a duty-free import quota of 500,000 tons of steel, “melted and poured,” for the U.K. annually. Higher volumes will face a 25 percent tariff. The deal also requires more stringent sourcing requirements for aluminum producers, requiring the importer to certify the origin of the raw materials. Economic officials think this addendum will help combat subsidized sourcing from China.
Furthermore, any British-based steel company owned by Chinese entities must hand over their books for audit. The audits will then assess the level of Chinese influence on the company. U.K. officials will share the findings with U.S. officials, per the trade agreement. The requirement will initially only apply to British Steel, acquired by China’s Jingye Group in 2020. Labor officials in both Western nations welcomed the terms of the deal.
The deal finalized after Raimondo met with Britain’s trade minister, Anne-Marie Trevelyan. An additional term of the trade deal includes an end to the U.K.’s retaliatory tariffs on American export goods like Harley-Davidson motorcycles, bourbon whiskey, Levi’s blue jeans, and cigarettes.
The British government hailed the deal as a ‘welcomed boost’
The United States also has similar deals in place with Japan and the European Union; which comprises the other Euro countries besides Great Britain. British Prime Minister Boris Johnson welcomed the deal in a tweet: “Fantastic news and a very welcome boost to our steel and aluminum industries.”
Trevelyan said the deal would help support some 80,000 jobs across Britain.
The U.S. Steelworkers Union said the deal represented “an important step.”
“[This agreement will aid] in addressing systemic problems like illegal dumping and global overcapacity that threaten the vitality and future of our steel and aluminum industries,” the union said.
The Trump administration imposed the tariffs of 10 percent on aluminum and 25 percent on steel in March 2018. President Trump said the tariffs were meant to protect U.S. producers from a flood of subsidized imports.