US and EU agree deal to cut tariffs on a small range of products

The EU will remove tariffs on imports of lobsters, while the US will halve its duties on imports of certain glassware, ceramics, disposable lighters and prepared meals

The US-EU deal is worth some €168 million ($198m), based on 2019 trade. Bloomberg

The US and the European Union have hatched a mini-deal to cut imports tariffs on a small range of products, including US lobsters, in a sign of an easing of transatlantic trade tensions.

The two, who have been in dispute over aircraft subsidies and US President Donald Trump's imposition of punitive tariffs on EU steel and aluminium, announced the deal in a joint statement on Friday.

"The importance of the deal is that it has unleashed positive results elsewhere," and EU official said.

Under the agreement, the European Union will remove tariffs of 8-12 per cent on imports of lobsters, while the US will halve its duties on imports of certain glassware, ceramics, disposable lighters and prepared meals.

To comply with World Trade Organisation rules, the lowered and removed tariffs will apply to all WTO members, although the products have been chosen so as to maximise the mutual benefits.

The whole deal is worth some €168 million ($198m/Dh727m), based on 2019 trade. The EU imported some €42m of US lobsters and exported to the US €126m of the other products involved. The apparent mismatch is partly because the US will only be halving, not removing, tariffs.

Lobsters have been deliberately chosen to appeal to President Trump, who threatened in June to impose tariffs on Europe and China over lobster duties.

The agreement will still need approval from EU governments and the European Parliament. That could come within weeks.

Washington has subjected $7.5 billion of EU products to tariffs because of a WTO case it won over EU subsidies given to planemaker Airbus and had threatened to increase them.

However, it carried out only very modest changes last week. The European Commission, which oversees trade policy in the 27-member EU, said this meant the US was not exacerbating the situation.

It has also noted the US comment that it is committed to resolving the aircraft dispute, which also includes US subsidies given to Boeing.