FX.co ★ EU and U.S. Strike Metals Deal to Tackle Chinese Overcapacity

The European Union and the United States have agreed to establish a "metals alliance" aimed at mitigating the effects of China's subsidized production in global markets, as part of ongoing trade discussions, EU Trade Commissioner Maros Sefcovic announced on Monday. After comprehensive negotiations, both parties have recognized a shared challenge facing their steel and aluminum industries. The agreement allows EU metal producers tariff-free or low-tariff access to U.S. markets via a quota system, replacing the previous 50% tariffs implemented by President Trump. The specifics of this system are still under development. "It became very evident that when it comes to steel and metals, we are not each other's problem," Sefcovic remarked. He characterized the agreement as a "clear prospect of joint action" encompassing steel, aluminum, copper, and related products. This initiative underscores a wider strategy to tackle China's industrial overcapacity and "illegal subsidies," issues also highlighted at the EU-China Summit and the recent G7 meeting, where concerns about global economic imbalances were prominently discussed.