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10 COMMERCIAL 24.3.2022 US rolls back Trump-era tariffs on UK steel THE US has agreed to ease Trump- era tariffs on UK steel and aluminium shipments, resolving an issue that had strained relations between the allies. e move follows earlier deals with the European Union and Japan over the controversial taxes, which were imposed by former President Donald Trump in 2018 in the name of national security. In exchange, the UK will suspend extra taxes it had put on US products such as bourbon and Levi's jeans. Business groups welcomed the deci- sion. Under the agreement, the US will replace the 25% tariffs on steel with a quota system. e policy will let UK metal imports into the country duty-free up to a cer- tain level - the quota - before taxes kick in again. e deal will go into effect 1 June. International Trade Secretary Anne-Marie Trevelyan said the deal had removed a "very frustrating ir- ritant", calling the agreement "good news for the steel and aluminium sec- tors, which support the jobs of over 80,000 people across the UK". "It means our manufacturers can now enjoy a high level of tariff-free access to the US market once again," she said. "Hopefully we can now move forward and focus on deepening our thriving trading relationship with the US." US officials also welcomed the sus- pension of the UK retaliatory tariffs, which they said affected about $500m (£377m) worth in annual trade. "e historical deal announced today delivers on President Biden's vision to repair relationships with our allies while also helping to ensure the long- term viability of our steel and alumini- um industries," said Ambassador Kath- erine Tai. However, in an interview Tai, the top US trade negotiator, refused to be drawn as to when or if discussions for a formal free trade agreement might start. "I think the issue is what kind of col- laboration is going to be fit for the pur- pose of addressing the challenges that we have today," she said. "I'm not going to exclude any options." e Biden administration has prior- itised domestic goals ahead of trade, said economist Chad Bown, senior fel- low at the Peterson Institute for Inter- national Economics. While that could change as the US seeks stronger rela- tions with allies in the context of Rus- sia's invasion of Ukraine, he said there's no evidence of that happening yet. "e US administration has not made any signs that they want to do trade agreements with anybody anytime soon," he said. "at would be a big change." e Biden administration's low prior- itisation of trade matters marks a ma- jor shift from former president Donald Trump, who made it a signature area of focus, using tariffs as bargaining chips in diplomacy. He set off a firestorm of criticism in the US and abroad when he announced the 25% tax on foreign steel shipments and 15% tax on foreign aluminium, cit- ing a need to preserve America's man- ufacturing base and rejecting concerns that tariffs raise prices. After allies, including the UK, hit US products such as Harley-Davidson motorcycles in retaliation, Mr Trump backed off the duties for certain coun- tries, including Canada, opting for quotas instead. US President Joe Biden later reached similar deals with the European Union and Japan. e approach has won praise in the US, including from groups like United Steel Workers for responding to the concerns of allies while still providing protection for US manufacturers. With many steel plants located in key election states, maintaining support from those workers is important for Mr Biden. On Tuesday the union praised the new deal for measures it said would help safeguard against unfairly subsi- dised steel production, such as man- datory annual audits of British Steel, which has a Chinese parent company. Business lobby UK Steel also praised the deal, saying it would be "felt by steel companies and their employees right across the UK and is immensely welcome". But with the quotas in place, con- sumers are unlikely to see benefits like lower prices, said Phil Levy, economist for Flexport. "Replacing tariffs with a system of quotas is actually moving away from transparency on these things and it does not get you the benefits of free trade," he said. American spirits exporters toast- ed the deal, which should make their bourbon whiskeys cheaper for UK shoppers. "Distillers throughout the United States are cheering the end of this long tariff nightmare," Dis- tilled Spirits Council President Chris Swonger said. e US and UK traded more than $260bn worth of goods last year, of which the majority were exports from the US such as metals, aircraft parts, oil and gas. While America accounts for near- ly one fifth of total UK trade, the UK market represents just 5% of US ex- ports. Mr Bown said the US imports too little British steel for a deal to have significant impact on prices. For UK consumers of American products, the impact on prices is also likely to be marginal, he said. "It can't hurt the consumer, so it will make them better off, but by how much is I think unclear," he said. The policy will let UK metal imports into the country duty-free up to a certain level - the quota - before taxes kick in again

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