From the G20 summit in Rome comes the pickaxe blow to Trump protectionism. Times change, and Joe Biden (pictured), in concert with the European Union, plans the agreement that puts an end to the duties imposed by Washington on steel (25%) and aluminum (10%), as well as retaliatory measures he decided from Brussels on some icons of made in the USA, such as Harley Davidson motorcycles and Levi’s jeans. The agreement is expected to free from tariff ties 6.4 billion euros of steel exports affected by the measures introduced in 2018, when The Donald escalated the already open trade conflict with the multi-year Airbus-Boeing dispute.
On balance, the pact will also remove about 3.5 billion that would have ended up in European duty traps starting from next December 1st. For Italy, the fifth exporter of steel to the United States, this is a relief that is equivalent to about 800 million euros of exports not subject to tariff barriers.
The aridity of the figures is coupled, as is often the case in these cases, with the rhetorical bass drum. Prime Minister Mario Draghi does not play it, who dryly hopes that “this agreement will be a first step towards further opening up trade between the EU and the United States, to favor the growth of both economies”; the president of the EU Commission, Ursula von der Leyen, who defines the agreement as “a key initiative for the transatlantic agenda”, struggles to keep it quiet; Biden, who speaks of a “milestone” in relations between the two sides of the Atlantic, hits it without too many problems. In short, the frost created after the US snatching France of a billionaire order for the supply of submarines to Australia seems to have melted.
Moreover, the White House has every interest in not exacerbating relations with Europe, at a time when relations with China have become complicated. Also on the commercial side. Beijing, according to the analysis of the Peterson Institute for International Economics, would not be respecting the Phase One agreements with which, in January 2020, America and the Dragon had laid the foundations for the total removal of all the plethora of exacerbations. tariffs accumulated during the trade war unleashed by Trump and the Chinese president, Xi Jinping. The pacification draft envisaged that, among other things, the former Celestial Empire would buy about 200 billion dollars of US goods and services in the two-year period 2020-21. At the moment, trade data shows that China has only bought 62% of US assets under the deal. Therefore, over 120 billion of purchases are missing from the appeal. If the crisis caused by the coronavirus represents a good alibi, the bad relations between Biden and Beijing could also have played a role in the failure to respect the roadmap.
With Europe, on the other hand, the situation had already improved in the middle of last June following the suspension for 5 years of all 11.5 billion in duties related to the Airbus-Boeing dispute, of which 7.5 billion on exports. European. Despite never having been part of the European aerospace consortium, Italy too had suffered damage due to US retaliation, which can be estimated in the agri-food sector alone at around half a billion euros. Even now that all the divided stakes introduced by Trump seem to have been removed, there is still work to be done. “In the next two years – explained the vice president of the EU Commission and Commissioner for Commerce, Valdis Dombrovskis -, we will work for a global agreement on steel, which would allow us to definitively eliminate 232 duties”. The knot, not easy to solve, will be that linked to global steel overcapacity.