EU Announces the Intention to Impose Counter-Tariffs Against the US
A top official of the European Union has said that they will launch retaliatory tariffs against exports from the US on Friday. The announcement comes after the imposition of more duties on Steel and Aluminum by President Trump earlier this month. Cecilia Malmstrom, a trade commissioner, confirmed that some of the exports that will be targeted by the new tariffs include motorbikes, cranberries, peanut butter, blue jeans and bourbon whiskey. Ms. Malstrom asserts that the EU has had to launch the tariffs because they were left with no choice.
Brussels listed the products in March when President Trump made proposals on the imposition of 25% tariffs and 10% on steel and aluminum imports respectively. The taxes target some close US allies such as Canada and Mexico. The EU announcement comes in the wake of an escalating trade row between the US and its partners.
Earlier this week, President Trump said that he would impose duties on another $200bn of goods from China. He also said that the 10% duties would be effected if China declined to change its practices. However, China is accusing the US of blackmail and asserts that it would fight the tariffs thus raising concerns over a possible full-blown trade war.
Ms. Malstrom says that the EU response conforms to the regulations of the World Trade Organization. She added that the counter tariffs which will affect up to €2.8bn worth of US goods would be scrapped if the US discarded the metal tariffs. The products that the EU is targeting have been chosen because of their political implications. For instance, the production of Bourbon whiskey occurs in Kentucky which is the state of Mitch McConnell, the Senate,majority leader. Also, orange juice is a vital export for the state of Florida. Florida is known as a swing state in the American elections.
Economists have raised concerns that the metal tariffs imposed by the US would result inhigher costs of metal, interfere with the supply chains which would then get passed on to the American households. Last week, the IMF stated that the protectionist policies adopted by the Trump administration would hurt not only the US economy but also the global trade system.
However, the US commerce secretary has disregarded the concerns saying that the impacts of the tariffs would be minimal. Earlier in March, Mr. Trump had indicated that he would impose higher duties if the EU raised the trade barriers on US firms. Some US politicians have criticized this move saying that it would hurt US businesses and alienate the allies.