“Negotiators from Brussels and Washington are scrambling to solve a five-year dispute over steel and aluminum dating back to former U.S. President Donald Trump’s decision to slap tariffs on European imports. They have until October to get a deal but are still so far apart that European officials now fear the chances of an agreement are slim.
Without a deal, both sides could reimpose billions of dollars worth of trade tariffs on each other’s goods — potentially spreading well beyond steel to hit products including French wines, U.S. rum, vodka and denim jeans.”
“Officials in Brussels see the ongoing negotiations as just another push from the U.S. to force them into taking a harder line against China. “The language just seems written to tackle one country specifically,” said one of the European officials.
Discussions only recently picked up pace through the exchange of a U.S. concept paper and then an EU response. Those texts showed how far apart the two sides are on key issues, the officials said.
Washington wants to impose tariffs on imported steel or aluminum products, which would increase progressively based on how carbon-intensive the manufacturing process is, according to the proposal seen by POLITICO. Countries that join the agreement, which would be open to nations outside the EU, would face lower tariffs, or none at all, compared to those that do not.
The EU’s response — also seen by POLITICO — does not include any form of tariffs, according to the officials. Brussels fears the American plan for tariffs goes against the rules of the World Trade Organization, which is a no-go for the EU.
But a senior Biden administration official, who spoke on the condition of anonymity to discuss ongoing negotiations, told POLITICO that tariffs should not be off the table.
“That’s a pretty powerful tool for driving the market both to reduce carbon intensity as well as to reset the playing field to counteract non-market practices and excess capacity,” the U.S. official said. “What we’ve been trying to understand and respond to, in part, is what are those reasons that the EU has to have concerns about a tariff-type structure.””
“Several officials said Washington is also seeking an exemption from the EU’s carbon border tax, which imposes a tax on some imported goods to make sure European businesses are not undercut by cheaper products made in countries with weaker environmental rules.
Such an exemption for the U.S. is another no-go for Brussels. A European Commission spokesperson said giving the U.S. a pass on the carbon border tax would constitute a breach of WTO rules and “cannot be compared with” the U.S. steel and aluminum measures.”
“Central and Eastern European countries, the most vocal supporters of arming Ukraine further, are equally dismissive of Beijing’s rhetoric.
“China’s plan is vague and does not offer solutions,” Ivana Karásková, who heads the China Observers in Central and Eastern Europe think tank based in Prague. “The plan calls on Russia and Ukraine to deal with the issue themselves, which would only benefit Russia; China continues to oppose what it calls unilateral sanctions and asks for the sanctions to be approved by the UN Security Council — well, given the fact that the aggressor is a permanent UNSC member with a veto right, this claim is beyond ridiculous.””
“There is one key factor explaining why imports to the EU from Russia haven’t fallen further: energy — and its price. During the five years that preceded the war, energy-related products represented two-thirds of all imports from Russia, in monetary terms.
European countries needed to find alternative providers before they could stop buying from Moscow — and even when they reduced their energy purchases, soaring prices meant that cash flows to Russia did not decrease proportionally.”
“The EU’s carbon border levy is the latest, and most symbolic, measure to upset the EU’s trade partners. The idea is that producers importing carbon-intensive products into the bloc will have to buy permits to account for the difference between their domestic carbon price and the price paid by EU producers.
The goal of the levy, called the Carbon Border Adjustment Mechanism (CBAM), was to level the playing field for EU producers and avoid companies moving their production over lower climate standards — so-called carbon leakage. For Brussels, the sense of climate urgency is too high to wait for others to follow suit, or to reach a deal at the multilateral or global level.”
“Brazil, South Africa, India and China have jointly expressed their “grave concern regarding the proposal for introducing trade barriers, such as unilateral carbon border adjustment, that are discriminatory.” The measure is likely to be challenged at the World Trade Organization.”
“The carbon border levy is far from the only measure to make exporting to the world’s biggest trading bloc harder.
Brussels’ Farm to Fork strategy seeks to prioritize sustainability in agriculture by slashing pesticide risk and use in half by 2030. A plan announced last September to ban imports of products containing residues of harmful neonicotinoid insecticides from 2026 has drawn “unprecedented” criticism from other countries, according to a senior European Commission official.
As the Green Deal tightens rules on pesticide use in the EU, new trade barriers are going up, said Koen Dekeyser of the European Centre for Development Policy Management (ECDPM). “Certain farmers can make those investments. Other, more small-scale farmers are likely to seek other markets, for example in Asia,” said Dekeyser.
The EU’s effort to stop deforestation is likely to have similar results.
Under new rules, it will be illegal to sell or export certain commodities if they’ve been produced on deforested land.”
“These are some of the biggest sanctions to date, as Europe — once the destination for about half of Russia’s oil exports — further weans itself off Russian energy. And Europe, along with the United States and other major economies, like the United Kingdom, Japan, Canada, and Australia, have agreed to a maximum of $60 per barrel on Russian seaborne oil, which means anyone who still wants to buy Russian oil has to pay that price or less, if it wants to ship cargo through operators or insurers based in the EU or other countries who signed on to this price cap.”
“There are a lot of unknowns, but this is a dramatic and unprecedented move by the US and its partners — especially given how dependent Europe was on Russian energy. “If anyone told you a year ago that the EU is going to effectively eliminate its dependence on fossil fuel imports from Russia, over a period of a year, you would have thought they’re a complete lunatic,” said Lauri Myllyvirta, lead analyst at the Centre for Research on Energy and Clean Air.
It’s true that Europe continued to buy a lot of Russian oil and gas in the first half of the year, even after Russia invaded Ukraine. It’s also true that Moscow itself cut off supplies of natural gas, giving Europe little choice but to find alternatives. But even so, it’s a real and rapid scrambling of a relationship, and the EU has largely (if not perfectly) been decreasing its Russian fossil fuel imports with the expectation of the ban and other measures. Starting in February, the EU will also ban oil product imports from Russia.”
“There are already caveats. Though Russia isn’t exactly going to be transparent about this, the $60 price cap appears to be about what Russia is already selling its oil for, which means Russia’s oil revenues are unlikely to nosedive immediately. Some countries, like Poland, pushed for a much lower cap, and Ukraine has also said this doesn’t go far enough. There are also some questions around enforcement, as shippers have to attest they are abiding by the price cap, and negotiators ended up weakening some of the penalties for violators.
But the US and its allies were trying to strike a balance through a mechanism that hasn’t been attempted before. They wanted to avoid completely disrupting global oil markets while applying more pressure to Russia’s oil profits. The cap is not firmly set, and is subject to a review every two months. That means it — and its enforcement mechanisms — are likely to be tinkered with depending on how this all plays out.
“This is about balance. It was never about not having any Russian oil on the market. It was about balancing supply and demand but also balancing the need to limit Mr. Putin’s ability to profit. And again, we think that $60 per barrel will do that,” National Security Council coordinator for strategic communications John Kirby said on a press call Monday.
“It doesn’t mean that that cap can’t be adjusted going forward as we see the way it’s being implemented, and as we see how the Russians might react to it,” Kirby added.”
“Here’s how it’s supposed to work in practice: Any actor in a jurisdiction of the price-cap coalition that transports, insures, or finances the shipment of Russian oil by sea, can only do so if the price per barrel is $60 or less.
The reason the coalition thinks it could work is because a lot of maritime operators, insurers, and reinsurers are based in Europe and the United Kingdom — or as Myllyvirta put it: “The two big things are Greek ships and UK insurers.” That market domination would make it costly and cumbersome to insure your ship against an oil spill, say, or find an available tanker that doesn’t fall under a jurisdiction that’s adopted the price cap.”
“Russia has said it will not sell oil subject to the price cap, even if it has to scale back production. But this is easier said than done because Russia still needs oil buyers, like China and India, who now have a lot of leverage. “Am I going to buy [oil] at anything above 60 bucks, knowing that’s the only option Russia has? Are you going to do Putin a solid and say, ‘No, I’ll pay you $65, I’ll pay you $70.’ I’m not sure why they would, especially because they have all the cards,” Smith said.”
“Russia is under unprecedented financial and energy sanctions, especially for an economy of its size. Russia has weathered a lot of that pressure so far, and its energy and resource exports are a huge reason why. Still, sanctions are undoubtedly having an effect. Russia’s economy has shrunk. Import bans on advanced technology are forcing Russian manufacturers to scale back features — no airbags in cars, for example — because they can’t get parts. That is also affecting Russia’s ability to make advanced weapons. And even if Russia was buoyed by its oil and gas sales, those are declining, and Russia has been heavily taxing some of its oil and gas industries to try to raise more revenues. That can’t work forever, either.”
“there are still more sanctions to impose on Russia — we’re not at the level of an Iran or a North Korea yet — but that would come with repercussions for the United States, Europe, and the rest of the world, all of which is struggling with inflation and rising food and fuel prices.”
“Much of the European ire is directed at an IRA requirement that electric vehicles must have their final assembly in North America to qualify for a $7,500 tax credit. That has eliminated many European models that previously qualified, and even more could be excluded when additional domestic content provisions take effect, beginning in January.
The Treasury Department is currently developing guidance for how it will implement that tax provision, and Biden referred specifically to language that provides better treatment for countries that have a free trade agreement with the United States as one area where the law could be implemented in a flexible manner.
“That was added by a member of the United States Congress who acknowledges that he just meant allies. He didn’t mean literally free trade agreement. So there’s a lot we can work out,” Biden said.
That would solve some of the EU’s problems, since it doesn’t have a free trade pact with the United States. However, there is still the bigger problem that many of the cars that European companies sell in the United States are assembled in Europe, disqualifying them for credit because of the North American assembly requirement.
Biden did not say how that could be addressed, but U.S. lawmakers in recent days have said the administration is considering giving automakers more time to comply with the IRA provisions. That’s an issue that the France and other EU member states will continue to discuss with the United States through a recently established bilateral task force.”
Is the war in Ukraine the fault of the West? John M. Owen IV. 2022 3 21. UVA: Miller Center. https://millercenter.org/war-ukraine-fault-west How Russia’s Attack on Ukraine Threatens Democracy Everywhere McGregor McCance and John M. Owen. UVAToday. 2022 3 2. https://news.virginia.edu/content/how-russias-attack-ukraine-threatens-democracy-everywhere [New School]
“After ten years of hard work to try and promote innovation and consumer welfare, the European Union has revealed its bold plan: to force device manufacturers to use a single charging standard.
The Eurocrats are now hard at work patting themselves on the back for this glorious outcome of the decade-long “trilogue on the common charger.” By 2024, wired devices sold in the EU must use the USB-C charging port and will not be sold with a charger by default. This is intended to “curb e-waste” and give consumers “more choice.” Can you feel the innovation? Never say the EU does not dream big.
Unless you are one of the 56 million or so Europeans who use iPhones, not much will change. Private companies have converged on common standards for years. Most, if not all, of your devices might already use the nifty USB-C charger, which in addition to being small and symmetrical, allows fast charging to boot.
And some Apple products, like my own MacBook Air, use the USB-C standard too. It is nice to be able to seamlessly charge my phone and my laptop without hassling with extensions.
The problem is the iProducts. Most, but not all, of these famously (or infamously) use Apple’s proprietary Lightning connector, which is incompatible with other companies’ devices. iPhones, iPads, and iPods usually use Lightning connectors, which means people need to have a separate charger for these specific products.
The Lightning charger has few fans today. It’s proprietary, it doesn’t always allow fast charging, and you’ll pay a lot for the privilege. Haters—and there are many—will be tempted to applaud this move by the EU.
But as usual, the EU’s meddling will almost certainly have the opposite effect that it is intending. Instead of “limiting e-waste,” this ban will create millions of useless chargers that will soon head to a landfill.”
“Although that rat’s nest of old chargers in your bedside table is aesthetically salient (and awful), it’s apparently not a big contributor to this ballyhooed e-waste problem. According to the 2020 Global E-Waste Monitor, chargers represent some 0.1 percent of the 53.6 million metric tons of tech garbage produced each year.
As usual, the EU is spending a lot of time and effort on something that is not that big of a problem in the grand scheme of things.”
“Apple is not a big fan of the rules, having argued that the prohibition on non-USB-C chargers will limit the kinds of innovations they can offer their customers. This might not convince the well-sized anti-Lightning community, but it is a little rich that professional bureaucrats who have not so much as opened a business in their lives would deign to tell some of the world’s most successful technology companies how to design their products.”
“as the export bans bite over the coming months, Russia will start to crave banned goods that are essential for its military and domestic economy. The Kremlin will also want to replenish its war chest with revenue from sales of sanctioned products — from coal and oil to caviar — to willing buyers overseas.
That means, sooner or later, Moscow will go sanctions busting.”