Possible lifting of Trump taxes on European steel and aluminum

Audio 01:36

Prices have increased in unprecedented ways over the past six months: 30 to 40% for steel, which has had the effect of drowning the impact of these American taxes.

© Getty Images / Monty Rakusen

By: Marie-Pierre Olphand Follow

4 min

The trade dispute between the European Union and the United States was on the menu at the transatlantic summit today.

Taxes imposed by Donald Trump on European steel and aluminum could be lifted.

What impact for the market?

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It is a conflict that has plagued relations between Washington and Brussels since 2018: 25% taxes on European steel, 10% on European aluminum.

Donald Trump struck hard to support the American steel industry.

Europe responded with taxes on Harley-Davidson motorcycles, tobacco and even orange juice from the United States.

Today, Joe Biden could announce a lifting of these taxes described as punitive by Brussels, lifted by December 1, in the spirit of appeasement that has prevailed since his arrival at the White House.

A political gesture eagerly awaited by the European Union which calls for action and not just intentions.

But this diplomatic gesture should not upset the European steel and aluminum market.

And for good reason, prices have increased in an unprecedented way over the past six months: 30 to 40% for steel, which had the effect of drowning the impact of these American taxes.

Steel is scarce and expensive, taxes have a marginal impact

The heavy trends in the economy linked to supply and demand are more important than the impact of this type of protectionist measures, explains an expert in the sector.

Today, the market is tight, unrelated to taxes.

Everyone is looking to import steel.

In the United States as in Europe, the lobby of the automobile manufacturers is pushing in this direction, therefore unlikely that European exports will jump after the lifting of taxes if it is confirmed.

The American market is not a major one for Europe, adds a French industrialist, who also believes that the lifting of taxes will not change the face of European trade.

This reasoning is even more true for aluminum.

The market has in fact become much more open geographically than that of steel.

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