US, EU Will Use Summit to Align Strategies on Russia, China

The US and European Union next week will seek progress on a plan to use revenue from frozen Russian assets to pay for Ukraine’s reconstruction.

(Bloomberg) — The US and European Union next week will seek progress on a plan to use revenue from frozen Russian assets to pay for Ukraine’s reconstruction.

The transatlantic allies will use a joint summit on Oct. 20 in Washington to underscore their support for Ukraine and reiterate calls for Moscow to end its war, according to a draft of the conclusions obtained by Bloomberg. EU ambassadors were due to discuss the draft later Friday.

After the meeting in Washington — which will be the first summit between President Joe Biden, European Commission President Ursula von der Leyen and European Council President Charles Michel in more than two years — they’ll also condemn the attacks against Israel and call for the protection of civilians. 

“We call for the immediate and unconditional release of all hostages,” according to the draft conclusions, which are still subject to change. “We stand ready to continue supporting civilian population in Gaza in coordination with partners.”

Spokespeople from the White House and the commission declined to comment on the document. 

They’ll also pledge to crack down on attempts to evade a price cap on Russian oil exports, even as signs mount the restriction is failing to cut Kremlin revenues as hoped.

The US and EU will also aim to strike a unified stance regarding China, saying that they will engage with Beijing while also trying to maintain fair trade relations.

“We are not decoupling or turning inwards,” according to the conclusions. “At the same time, we recognize that economic resilience requires de-risking and diversifying.”

The draft includes placeholders for agreements the two sides are looking to conclude on critical minerals, as well as steel and aluminum.

The so-called Global Steel and Aluminum Arrangements would see the EU and US work together to tackle excess capacity and carbon emissions in the metals, Bloomberg previously reported. The GSA would allow to avert the return of billions of dollars in Trump-era tariffs and EU retaliatory measures.

On excess capacity the EU would launch new investigations in the coming months that could lead to new tariffs aimed at the non-market practices of economies such as China while the US could introduce new levies of its own.

The EU and US are continuing to make progress on the issues and negotiations continue, according to a US official, who spoke on the condition of anonymity. 

The US has imposed a 25% tariff on steel imports since 2018 and the EU applies about the same level of duties on an array of steel imports under its own safeguard measures. That level of tariff would act as a reference point that can then be adjusted on a case-by-case basis, Bloomberg reported earlier.

The EU would implement its part of the accords aimed at dirty steel through the carbon border adjustment mechanism while the US could introduce additional tariffs and measures.

The Biden administration and the European Commission are aiming to announce a political deal next week in DC and then work toward an international agreement open to other like-minded countries.

A deal on critical minerals, meanwhile, is needed to allow European firms to access some of the benefits of Biden’s Inflation Reduction Act, which includes roughly $500 billion in new spending and tax breaks over a decade to benefit US companies.

–With assistance from Jorge Valero.

(Updates with details on negotiations in the 12th paragraph.)

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