On May 21, 2018, the European Union (EU) and the United States (US) reached an agreement to suspend the tariff increase on steel and aluminum. This agreement initiated a period of discussions between the two parties that would last until March 1, 2019, in an attempt to find a long-term solution to trade tensions.
The discussions led to the EU and the US agreeing on a framework that sought to reduce trade tensions and promote fair trade. The framework included a commitment to work towards zero tariffs, zero non-tariff barriers, and zero subsidies on non-auto industrial goods. The EU also agreed to increase its imports of US liquefied natural gas (LNG) and soybeans.
Despite the progress made, the EU and the US have not reached a comprehensive trade agreement. As a result, the US implemented tariffs on $7.5 billion worth of EU goods on October 18, 2019. The EU retaliated by imposing tariffs on $3.4 billion worth of US goods on November 10, 2020.
The tariffs have had a significant impact on the affected industries. For example, the US tariffs on EU wines have led to a decline in imports, which has affected the US wine industry. The EU tariffs on US products such as motorcycles and whiskey have also led to a decline in exports, affecting the US motorcycle and whiskey industries.
The COVID-19 pandemic has further complicated the trade tensions between the EU and the US. The pandemic has led to a decrease in trade volumes, with both the EU and the US implementing measures to protect their industries.
The new Biden administration has presented an opportunity for the EU and the US to strengthen their trade relationship. On March 5, 2021, the two parties agreed to suspend the tariffs for a period of four months to allow for discussions towards finding a long-term solution.
In conclusion, the EU and US agreement on tariffs has had a significant impact on trade between the two parties. While a comprehensive trade agreement is yet to be reached, the suspension of tariffs presents an opportunity for the EU and the US to find a long-term solution to their trade tensions.