Trade relations between the United States and the European Union (EU) are improving with a recent resolution between the two parties. American ag exporters have been struggling to navigate increased tariffs because of a tumultuous EU trade relationship. A long-running dispute centered on large civil aircraft subsidies has been temporarily tabled as the two sides work towards a more long-term resolution. Under a recent cooperative framework, tariffs for multiple products including agricultural goods are being lifted for a period of five years.
“This trade announcement was a step in the right direction, illustrating the Biden Administration’s commitment to working with our European allies to engage in meaningful cooperation,” Representative Jim Costa said in a press release. “While there is more work to do to address persistent agricultural trade barriers, I am pleased to see that US farmers and ranchers will not be burdened from retaliatory tariffs, as a result of this deal.”
The troubling EU trade relationship stems from a disagreement between Boeing and Airbus. A series of tariffs were enacted by both trading partners on billions of dollars worth of goods. Back in March, the two sides agreed to a temporary halt to the tariffs. The recent cooperative framework is a continuation of that agreement, putting an end to the escalating tariffs. However, U.S. Trade Representative Ambassador Katherine Tai indicated that tariffs could be imposed again if they are deemed necessary.
The improving EU trade relationship bodes well for many American ag producers. U.S. vegetables, cotton, and nuts were among the products incurring hefty tariff increases. Several agricultural groups have issued support of the recent development to improve U.S.-EU trade relations. However, some commodity groups are encouraging further action to be taken to allow for better ease of trade for agricultural products. Multiple dairy groups are seeking resolution for a number of EU trade practices that make it overly burdensome for U.S. dairy producers to compete.