BRUSSELS TO OFFER STEEL TRUCE EXTENSION: The European Commission is expected today to announce its decision to delay the reimposition of retaliatory tariffs, an offer that would present the Biden administration a chance to push back the long-running steel and aluminum dispute until after the 2024 election. The tariff truce would extend from Jan. 1 and last 15 months. That means European tariffs on American products such as whiskey and motorbikes will be paused until the end of March 2025, shortly after the winner of the 2024 presidential contest takes office, according to diplomats granted anonymity to speak to POLITICO. Catch me up: The EU and the U.S. have been racing to find an agreement to prevent tariffs on billions of dollars of trade kicking in on both sides of the Atlantic to resolve a steel and aluminum dispute dating back to 2018 that was triggered by former U.S. President Donald Trump. On Friday, European Commission Executive Vice President and Trade Commissioner Valdis Dombrovskis confirmed the transatlantic partners were nearing an agreement to extend the truce while talks continued to reach a more permanent solution. “We are focusing ... on the extension of the current suspension of tariffs on the US side and our retaliatory tariffs,” Dombrovskis said, according to the Financial Times. Despite bringing temporary relief to industry, the resolution falls short of expectations that the contention would permanently be resolved, rather than shelved until potentially the next administration. One explanation? Officials from the European Union are quietly expressing concerns that a transatlantic tariff fight could inadvertently boost the Trump campaign, according to diplomats and people close to discussions, who’ve spoken to Morning Trade and were granted anonymity because they are not authorized to speak on record. In theory, the prospect of another Trump presidency could grant the Biden administration extra leverage to eke out concessions as both sides hammer out talks in the yearslong dispute, and make progress toward a new "global arrangement" aimed at reducing global carbon emissions and excess capacity. But Brussels has so far held firm in its bid to alter the tariff-rate quota arrangement agreed to two years ago, and one diplomat said the terms have not improved, despite complaints that the TRQs were cumbersome to implement across EU countries. What’s next? Today’s announcement will pile pressure on the Biden administration to issue a new executive order to delay the reimposition of a 25 percent tariff on EU steel and a 10 percent tariff on EU aluminum, but it's not clear yet how soon that will happen. Camille, Doug and Antonia have more. BURNS EYES DOUBLING OF U.S.-CHINA FLIGHTS: The Biden administration hopes to strike a deal with China in 2024 that would double the number of flights per week between the United States and China to around 140, U.S. Ambassador Nicholas Burns said during a discussion at the Brookings Institution. Getting all the way back to the pre-pandemic level of 345 flights per week, from 70 now, “is difficult,” Burns said. “It's got to be reciprocal. And the American airlines have to be defended so they can operate on a level playing field with their Chinese competitors.” One problem is that American airlines are barred from traveling over Russian airspace because of the Ukraine war. Chinese airlines are not, giving them a time and fuel cost advantage. “So our Department of Transportation, our great secretary, Pete Buttigieg, is doing the right thing by insisting on reciprocity and so we're inching forward,” Burns said. Ripple effect: Increased flights would also help restore tourist and educational travel between the two countries, which are down sharply from pre-pandemic levels. “If we're going to bring the people back, we’ve got to have flights,” the ambassador said. Warming ties? Not so fast: “I don’t feel optimistic about the future of U.S.-China relations,” Burns also said during the event Friday in response to a question. “I feel that we need to see how things develop.” Burns said the word “hopeful,” rather than optimistic, more accurately described his feelings in regard to future U.S.-China relations. The remark comes a month after Biden met with China’s Xi Jinping on the sidelines of the Asia-Pacific Economic Cooperation forum in San Francisco, which Burns called “productive,” explaining that both countries have so far followed through with their commitments. U.S.-JAPAN TOUT TIES AS CHINA THREAT LOOMS: Officials from the United States and Japan discussed progress toward a critical minerals arrangement during the fourth round of meetings under the U.S.-Japan Partnership on Trade last week, USTR announced. The countries also discussed the digital economy, labor and human rights, and expressed shared concerns over the “non-market and trade-distorting practices” of select countries, according to a press release.
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