28 September 2026 – The United States and China are extending their trade truce and exchanging tariff lists covering around $30 billion each. Little is binding so far, and metals are absent entirely. But the signal matters. Europe, meanwhile, is choosing escalation and paying the price. At the G20 meeting in Milwaukee, alleged steel overcapacity will also be on the agenda. But is that capacity really in Asia, as the EU likes to claim?
Trade Dispute: Washington and Beijing Are Talking. Brussels Is Escalating
Following Xi Jinping’s state visit, the United States and China are extending their trade truce and exchanging their first tariff lists. It is not yet a comprehensive breakthrough, but it is a lesson Europe appears determined to ignore.
Eighteen months ago, trade between the world’s two largest economies seemed close to collapse. In April 2025, US tariffs on Chinese goods stood at 145 per cent, while Beijing retaliated with 125 per cent. Today, both sides sit together on a joint Board of Trade and exchange product lists. That is real progress.
What the State Visit Achieved
Following the White House meeting, both sides extended their trade truce until 10 January 2027. China has committed to purchasing at least ten million tonnes of US coal in both 2027 and 2028. Negotiations over rare earth supplies are continuing.
The most tangible step followed over the weekend: the so called 30 for 30 lists. Each side is to grant lower tariffs on goods worth around $30 billion. The US list includes kitchen appliances, toys and Christmas decorations from China. The Chinese list covers US agricultural products, seafood, timber and medical products.
An Important Signal in the Tariff Dispute
Tariff rates, deadlines and entry into force remain unknown. So far, the package has not been formalised through a Federal Register proclamation and remains an expression of intent. Steel and aluminium appear on neither list, while Section 232 tariffs remain untouched as expected. For metals trade, nothing changes for now.
And yet the signal matters. Those who exchange lists are not firing at each other. Every round of negotiations reduces the risk of the next escalation. For importers and consumers, predictability is worth more than retaliation rhetoric.
Europe Is Choosing the Wrong Path
Brussels has chosen the opposite approach towards China. Countervailing duties on Chinese electric vehicles were met with Beijing’s retaliatory tariffs on cognac and pork. Since July, a steel regulation has almost halved import quotas and imposes a 50 per cent tariff above them. On top of that comes one anti dumping proceeding after another. Europe appears to have lost all sense of proportion.
There is no recognisable negotiating strategy in Brussels, only protectionism. Europe’s economy, dominated by small and medium sized enterprises, ultimately pays the bill through higher input costs. That not only fuels inflation in domestic markets, but also erodes international competitiveness as production costs in Europe continue to rise.
Of all people, Donald Trump, who wielded the tariff hammer more aggressively than almost anyone else, is now demonstrating that it is possible to talk to China again. Europe would be better advised to pay attention rather than ignite the next round of escalation.
G20 Meeting: Steel Overcapacity in Focus?
On Wednesday, the Global Forum on Steel Excess Capacity meets in Milwaukee. It forms part of the G20 trade ministers’ meeting hosted by US Trade Representative Jamieson Greer from 29 September to 1 October. Brussels will once again point the finger at Asia.
Ten Years of the Forum, Little to Show for It
The forum was established at the G20 summit in Hangzhou in 2016. China withdrew in 2019. Since then, the remaining members have largely discussed the capacity of countries no longer sitting at the table. The OECD puts alleged global excess steel capacity in 2025 at 640 million tonnes.
Europe: Plenty of Criticism for Everyone Else
According to the OECD, the EU had crude steelmaking capacity of 208 million tonnes in 2019 and 206 million tonnes in 2023. In four years, capacity fell by barely more than one per cent. As early as 2014, the Commission itself concluded that the EU had around 80 million tonnes of excess capacity. Little has happened since.
Protection Instead of Structural Change
With ever more steel protection measures, the Commission is preserving precisely the overcapacity it will condemn in Milwaukee. Anyone preaching capacity reductions should start with their own blast furnaces.
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