US wins end of EU lobster tariffs in mini trade deal

lobsters caught in the Gulf of Maine Image copyright Getty Images

The European Union has agreed to eliminate tariffs on US lobster, a key priority of President Donald Trump.

In exchange, the US will halve import taxes on some $160m (£122m) worth of European goods, including cigarette lighters and certain crystal glassware.

The agreement is the first tariff reduction the two economic heavyweights have agreed in more than two decades.

Mr Trump had threatened higher tariffs on European cars if the EU did not end the lobster duties.

In June, he ordered aid for US lobstermen, whose exports have suffered in part due to deteriorating trade relations.

China slapped tariffs on the crustacean as part of the US-China trade dispute, while in the EU market, the industry has lost ground to competitors from Canada, after the country signed a 2017 free trade agreement eliminating Europe’s 8% lobster tariffs.

The new US agreement, which would drop the lobster tariffs for five years, still needs approval from EU governments and the European Parliament.

‘Improving relations’

The US and EU remain at odds on numerous trade issues, including tariffs Mr Trump imposed on foreign steel and aluminium, European taxes on tech giants and subsidies for Boeing and Airbus, which have led to tariffs on $7.5bn worth of European goods.

A wider trade deal, which the two sides started discussing last year, has remained out of reach.

“As part of improving EU-US relations, this mutually beneficial agreement will bring positive results to the economies of both the United States and the European Union. We intend for this package of tariff reductions to mark just the beginning of a process that will lead to additional agreements that create more free, fair, and reciprocal transatlantic trade,” US Ambassador Robert Lighthizer and EU Trade Commissioner Phil Hogan said in a joint announcement.

In 2017, the US exported more than $111m worth of lobster to the EU. Many of the shipments came from the state of Maine, a political battleground for Republicans and Democrats.

The state narrowly supported Mr Trump’s Democratic opponent Hillary Clinton in the 2016 presidential election, but is represented in the Senate by Republican Susan Collins, who is facing a tough re-election fight.

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Media captionUS lobster trade feeling pinch from tariffs

A request by the US for a deal on lobsters had been rejected by the EU last year, with Brussels insisting on a broader package, but more recently the two sides have shown signs of trying to reduce tensions.

Earlier this month, the US refrained from a rise in tariffs it had threatened over European subsidies for Airbus.

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