(Bloomberg) -- The European Union is considering reopening a case at the World Trade Organization against the US over a Trump-era steel and aluminum dispute that saw the allies hit each other with tariffs on more than $10 billion of goods. 

But importantly, the EU will refrain from immediately reimposing retaliatory tariffs on American goods over the disagreement, conceding a key point in the negotiations to Washington, according to people familiar with the discussions.

By restarting the WTO case, the EU would keep the door open on imposing the tariffs in the future while at the same time prolonging a settlement that avoids the return of duties on billions of dollars of exports next month. A final decision has yet to be taken by Brussels, said the people, who spoke on the condition of anonymity.

Bloomberg reported earlier that the EU was opposed to hitting the US with tariffs over fear that it could boost Trump’s campaign ahead of the American election in November. The EU and US have been in intense negotiations for months trying to find a resolution to the dispute. 

A spokesperson for the European Commission, the EU’s executive arm, didn’t immediately respond to a request for comment. 

The trade conflict started when former President Donald Trump imposed levies on European steel and aluminum, citing national security concerns, prompting the EU to retaliate with restrictive measures of its own. The commission reached a temporary truce with the Biden administration in 2021. 

The EU and US gave themselves a two-year window to reach an agreement on the so-called Global Arrangement on Sustainable Steel and Aluminum that would permanently put an end to the conflict and the tariffs. Failure to reach a deal could see some of those duties return next year.

As part of the 2021 truce, the US partly removed its measure and introduced a set of tariff-rate quotas above which duties on the metals are applied. Alternately, the EU froze all of its restrictive measures. That has created an unbalanced situation, according to the EU, that has seen the bloc’s exporters pay over $350 million a year in duties.

With GSA talks stalled, the two allies have been in talks to prolong the terms of the truce. The US wants to extend the status quo beyond the American election until the end of 2025. The EU has been asking to replace the current tariff-rate quota system — which comprises dozens of both quarterly quotas and categories of steel — with annual quotas in order to better reflect historical flows.

Trump Boost

The Biden administration has so far rebuffed that request, the people said. However, many EU member states are reluctant to respond to that refusal by reimposing tariffs on some US goods due to concerns that it could help Trump’s election chances next year, Bloomberg previously reported. The US may still make some minor concessions. 

“The EU might have been able to hold out for more from the US on improving the quota administration, but it would have required dragging this out until the end of the year and it was fairly common knowledge that member states didn’t want these tariffs to kick back in,” Sam Lowe, a partner at the international advisory firm Flint Global, said in an interview.

--With assistance from Joe Deaux.

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