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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.

The 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 decision.

Under the agreement, the US will replace the 25% tariffs on steel with a quota system.

The policy will let UK metal imports into the country duty-free up to a certain level - the quota - before taxes kick in again.

The deal will go into effect 1 June.

International Trade Secretary Anne-Marie Trevelyan said the deal had removed a "very frustrating irritant", calling the agreement "good news for the steel and aluminium sectors, 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."

Free trade deal next?

US officials also welcomed the suspension of the UK retaliatory tariffs, which they said affected about $500m (£377m) worth in annual trade.

"The 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 aluminium industries," said Ambassador Katherine Tai.

However, in an interview with the BBC, Ms 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 collaboration is going to be fit for the purpose of addressing the challenges that we have today," she said. "I'm not going to exclude any options."

The Biden administration has prioritised domestic goals ahead of trade, said economist Chad Bown, senior fellow at the Peterson Institute for International Economics.

While that could change as the US seeks stronger relations with allies in the context of Russia's invasion of Ukraine, he said there's no evidence of that happening yet.

"The US administration has not made any signs that they want to do trade agreements with anybody anytime soon," he said. "That would be a big change."

Trump tariffs

The Biden administration's low prioritisation of trade matters marks a major 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, citing a need to preserve America's manufacturing base and rejecting concerns that tariffs raise prices.

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