EU-US Mineral Accord Possible Amid Steel Setback, per French Sources

EU-US Critical Minerals Agreement Progress

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According to French Trade Minister Olivier Becht, there is optimism that the European Union and the United States can come to an agreement regarding critical minerals in the near future, despite their recent challenges in reaching a consensus on steel and aluminum trade. Becht expressed this positive outlook on Friday.

Initially, trade negotiators from the U.S. and the EU had set their sights on resolving the Trump-era metals tariffs and mitigating the impact of the U.S. Inflation Reduction Act (IRA) before a meeting between U.S. President Joe Biden and top EU officials, which was scheduled for Friday. However, the meeting's agenda has now shifted to address the pressing Middle East crisis.

Becht acknowledged that progress with the American counterparts had not been as swift as hoped, but he remains hopeful for the future. He stated this before a gathering of EU ministers focused on trade matters in Valencia, Spain.

Nevertheless, Becht anticipates that an agreement will be reached "in the next weeks, in the next months." This agreement would ensure that critical minerals, essential for electric vehicle batteries and sourced from Europe, become eligible for the consumer tax breaks outlined in the IRA.

Becht emphasized that such an agreement is in the best interests of both Europe and the United States. It is worth noting that the U.S. had previously suspended import tariffs on EU steel and aluminum, initially imposed during the tenure of President Donald Trump in 2018. This suspension, however, is contingent on both parties agreeing to measures addressing overcapacity in non-market economies like China and promoting environmentally sustainable steel production.

Although they had initially aimed for a resolution by the end of October, negotiators are now targeting a deal by the close of the year. One key point of contention is that Washington is urging the EU to apply the metal tariffs to imports from China, while Brussels maintains that it cannot do so until it completes a year-long investigation to comply with World Trade Organization regulations.

Source: Reuters (Reporting by Belén Carreño)