EU, US to keep talking about tariffs as war in Israel and Ukraine overshadow summit By Reuters

By Andrea Shalal and Jarrett Renshaw

(Reuters) -U.S. and European Union trade negotiators failed to reach deals to settle longstanding trade disputes in the run-up to a summit at the White House on Friday, but Washington agreed to continue providing some relief from tariffs on steel and aluminum, with talks set to continue.

President Joe Biden will discuss the Israel-Hamas war and stress unity on support for Ukraine when he hosts European Council President Charles Michel and European Commission chief Ursula von der Leyen, even as hopes for resolving longstanding trade disputes dimmed.

Trade negotiators were scrambling on Thursday to avoid the U.S. resuming import tariffs on EU steel and aluminum imposed by then-President Donald Trump in 2018 before November.

“We are committed to continuing the work on the Global Arrangement with the EU in the months ahead,” a senior U.S. administration official said about talks between the two sides, adding that the United States would roll over tariff rate quotes, or TRQs, by the end of the year if more time for talks was needed.

“We are committed to providing certainty to our industry and workers and to our EU partners,” the official said.

The move staves off the resumption of Trump-era tariffs on EU-produced steel and aluminum that the Biden administration had agreed to halt in exchange for a quota system, but it was unclear how long a reprieve would be granted.

The Biden administration suspended tariffs on EU steel and aluminum imports on the condition that both sides agree by the end of this month on measures to address overcapacity in non-market economies such as China, and to promote greener steel.

Any deal seems far off, with Washington keen that the EU apply the metal tariffs to imports from China and Brussels refusing to do so before a year-long investigation to comply with World Trade Organization rules.

Also elusive appeared a deal to lessen the hit from the U.S. Inflation Reduction Act, which offers consumers tax breaks to buy electric vehicles (EVs) assembled in North America.

One of the sources said the two sides had made some progress on an agreement that would allow EVs with EU-sourced critical materials – cobalt, graphite, lithium, manganese and nickel – to qualify for partial tax breaks, but were unlikely to finalize an agreement before Friday’s summit.

The Israel-Hamas war, and a looming ground offensive by Israel into Gaza were likely to dominate the discussions, von der Leyen said in Washington, warning about the risk of “regional spillover” from the conflict.