UPDATE 2-US, EU weigh climate-based tariffs on Chinese steel, aluminium -Bloomberg News

(Changes date, adds no comment from China, context on tariffs)

Dec 6 (Reuters) - The United States and the EuropeanUnion are weighing new tariffs on Chinese steel and aluminium aspart of a bid to fight carbon emissions, Bloomberg News reportedon Monday, citing people familiar with the matter.

China, which produces more than half of the world's steel,is accused by the EU and United States of creating over-capacitythat is threatening the survival of their own steel industries.

The idea floated within President Joe Biden's administrationis still in an initial phase and hasn't been formally proposed,the report said, adding that an agreement with the EU isn'tlikely until late next year at the earliest.

The office of the United States Trade Representative anda spokesperson for the European Council for trade anddevelopment did not immediately respond to Reuters requests forcomment.

China's Ministry of Commerce, the China Iron and SteelAssociation and China Nonferrous Metals Industry Associationcould not be reached for comment.

The new framework, which is somewhat similar to an agreementreached between the EU and United States last year, is mainlyaimed at China, along with other large polluting nations, theBloomberg report said.

U.S. Trade Representative Katherine Tai and her team hadpresented the framework to European Commissioner ValdisDombrovskis and others in Prague in late October, the reportsaid.

However, EU officials had then raised the issue of legalityand compatibility with World Trade Organization rules, as wellas with the bloc's internal carbon pricing mechanism, the reportsaid.

China currently exports little steel and aluminium to theUnited States, with most products excluded from the market byanti-dumping duties as well as trade tariffs.

Last year, steel exports to the U.S. accounted for 2.1%of total overseas shipments, according to Chinese customs data,and aluminium exports typically account for around 5%.

The European Union also already levies tariffs on someChinese aluminium and steel products.

Global iron and steel production emit a combined 3.4billion tonnes of carbon annually, or 7% of global emissions,according to consultancy Wood Mackenzie.

China produces more than 60% of the world's steel and57% of aluminium.(Reporting by Akriti Sharma in Bengaluru and Siyi Liu inBeijing; Editing by Leslie Adler and Deepa Babington)

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