US demands ‘balanced’ EU digital rules before it lowers steel tariffs

The United States on Monday demanded that the European Union overhaul its regulation of the tech sector in exchange for a reduction of U.S. tariffs on steel and aluminium imports from the bloc.

EU ministers had planned to use their meeting with top U.S. trade officials to push for the implementation of their July trade deal, with cuts to U.S. tariffs on EU steel and their removal from EU goods such as wine and spirits.

But U.S. Commerce Secretary Howard Lutnick, on his first visit to Brussels since taking office, said the 27-nation EU first needs to rethink its digital sector rules to make them more balanced.

"And if they can come up with that balanced approach, which I think they can, then we will, together with them, handle the steel and aluminum issues," Lutnick told reporters after he and U.S. Trade Representative Jamieson Greer's 90-minute meeting with EU ministers in Brussels.

NO IMMEDIATE BREAKTHROUGHS EXPECTED

Ahead of that meeting, European Trade Commissioner Maros Sefcovic said he did not expect any immediate breakthroughs with his U.S. counterparts, but believed the conditions were in place to start discussing a solution for steel.

Under the end-July deal, the United States set 15% tariffs on most EU goods, while the European Union agreed to remove many of its duties on U.S. imports.

That may only happen in March or April, given it requires approval from the European Parliament and EU governments, which EU diplomats say has exasperated Washington.

But while insisting the process is on course, the 27-nation bloc is also pointing to agreed items on which it wants to see progress, chief among them steel and aluminium.

The United States has a 50% tariff on the metals and since mid-August has applied this to the metal content in 407 "derivative" products such as motorcycles and refrigerators. More derivatives may be added next month.

EU diplomats say that such actions, along with the prospect of new tariffs on trucks, critical minerals, planes and wind turbines, threaten to hollow out the July accord.

The bloc also wants a broader range of its products subject only to low pre-Trump duties. Its wish list includes wine and spirits, olives, pasta, medical devices and biotech.

The EU is also ready to discuss areas of possible regulatory cooperation, such as cars, the bloc's purchases of U.S. energy, which has hit $200 billion this year, and joint efforts on economic security, particularly in response to Chinese export controls.

Ahead of the meeting with Lutnick, the European ministers gathered to discuss pressing trade issues, including Chinese rare-earth and chip export restrictions.