AsianFin -- The European Union is seeking to restart negotiations over U.S. tariffs on metal imports as Washington is starting implement lower auto levies as part of broader trade deal.

Credit：European Commission

EU Trade Commissioner Maros Sefcovic plans to raise the issue of steel and aluminum tariffs when he is poised to meet with U.S. Trade Representative Jamieson Greer on the sidelines of the ASEAN ministerial summit in Kuala Lumpur this week, Bloomberg reported on Wednesday. Sefcovic, the EU’s trade chief, during the meeting will try to revive the stalled talks to reduce these metal tariffs.

The European Commission, the EU’s executive arm responsible for trade matters, has proposed to eliminate or significantly reduce the duties, but according to Sefcovic, it has not received response to its offer.

“The most logical step would be to proceed with a tariff-rate quota, with low or no tariffs,” Sefcovic said in a Bloomberg interview. “It would be premature to elaborate further because we so far haven’t received the response to this proposal, but we know that it’s very important for our industry and therefore we are permanently putting it on the table.”

The EU intends to establish a quota for the steel and aluminum trade, with reduced or zero tariffs on all exports from the bloc under that limit. However, the Trump administration on August 21 expanded its 50% steel and aluminium tariffs to include more than 400 additional product categories, hitting the U.S.-EU trade deal announced in July. 

Sefcovic on Wednesday said the European Commission is preparing concrete proposals to resolve the metal tariff issue, though there has been no “concrete reaction.”  German Chancellor Friedrich Merz said last week that solutions to the high steel and aluminum tariffs were “well on the way,” but didn’t provide further details.

In a Federal Register notice field on Wednesday, the Commerce Department and the U.S. Trade Representative's office said they have amended the tariff schedule to formally implement the U.S.-EU trade agreement stuck in July that lowers the U.S. tariffs on most imports from the EU to 15%, including the levy on cars retroactive to August 1. 

The notice also confirms exemptions for European aircraft and aircraft parts, generic pharmaceuticals and certain natural resources from tariffs the Trump administration has introduced in recent months.

Under the Framework on an Agreement on Reciprocal, Fair, and Balanced Trade released on August 21,  the U.S. commits to apply the higher of either the U.S. Most Favored Nation (MFN) tariff rate or a reciprocal tariff rate of 15% on goods originated from the EU. Effective as of September 1, the U.S. commits to apply only the MFN tariff to European products including cork and other unavailable natural resources, all aircraft and aircraft parts, generic pharmaceuticals and their ingredients and chemical precursors.

In exchange, the EU intends to procure U.S. liquefied natural gas (LNG), oil, and nuclear energy products with an expected offtake valued at $750 billion through 2028. The bloc also intends to purchase at least $40 billion worth of U.S. artificial intelligence (AI) chips for its computing centers. European companies are expected to invest an additional $600 billion across strategic sectors in the U.S. through 2028. In addition, the EU plans to substantially increase procurement of military and defence equipment from the United States

The Framework Agreement secures “the best possible terms for the EU companies and consumers”, said EU Commission President Ursula von der Leyen in her post on social media X. She outlined the key terms such as exclusive guarantee on tariff limit for pharmaceutical and semiconductors sectors, all-inclusive 15% tariff ceiling for the vast majority of products, including on cars and pharmaceuticals, and zero-for-zero tariffs on products like aircraft, cork and generic pharmaceuticals.

As to the auto tariffs, the Framework Agreement suggested the U.S. will levy conditional tariffs. That means the American tariffs on automobile and parts imported from the EU will be capped at 15% , down from the current 27.5% rate, if the EU first introduce legislation to reduce its industrial duties.

Wednesday’s government notice about the auto tariff cuts was  “something that the EU needs to see,” said Andrew Puzder, the new U.S. ambassador to the EU, told the Wall Street Journal the same day. Puzder said the decision to lower auto tariffs before the EU’s legislation has passed is a gesture of good faith and a sign of how the U.S. plans to approach its ongoing trade talks with the bloc—including on steel and aluminum.