The EU today said it would hit flagship US products including peanut butter, orange juice and bourbon whiskey with counter measures if US President Donald Trump goes ahead with threatened steel and aluminium tariffs. The blow by Brussels came hours after Trump’s trade offensive brought the resignation of his top economic advisor Gary Cohn, an influential ex-Goldman Sachs banker who fiercely opposed the measures.
EU trade commissioner Cecilia Malmstroem said a full-on transatlantic trade war was “not in anybody’s interests” — a stark contrast from Trump, who last week declared trade wars were “good and easy to win”. A trade war has no winners,” Sweden’s Malmstroem told reporters after the European Commission, which handles trade matters for the bloc, discussed the tariffs. We should be very careful with that word… there are only losers in that, and that’s why we will respond in a proportionate and balanced way.”
The European Union is holding fire on its reprisals as Trump has yet to sign into effect his plan to set tariffs for what he calls unfair competition for US industry, but Malmstroem said a list of products had been drawn up including steel, industrial and agricultural items. Certain types of bourbon are on the list as are other items such as peanut butter, cranberries, orange juice,” Malmstroem said. European Commission chief Jean-Claude Juncker on Friday threatened to hit big-name US brands such as Harley Davidson motorbikes and Levi’s jeans with import duties, prompting Trump to fire back a threat to tax cars from the EU.
Despite Juncker’s headline-grabbing threat to iconic US brands, the EU’s hitlist does not mention specific businesses. Malmstroem said the EU was still trying to persuade Washington not to go ahead with the tariffs, which she said would threaten “thousands of European jobs”. The EU is also looking at “safeguard” measures to protect its industry — restricting the bloc’s imports of steel and aluminium to stop foreign supplies flooding the European market, which is allowed under World Trade Organisation (WTO) rules.
Trump, elected on a promise to roll back the effects of globalisation on the US economy with an “America First” platform, said Thursday he planned to impose 25 percent tariffs on steel imports and 10 percent on aluminium. Juncker, who on Wednesday met Lakshmi Mittal, the boss of the world’s top steelmaker ArcelorMittal, said last week the EU would “react firmly” to protect European industry. Europe exports around five billion euros’ ( 4 billion) worth of steel and a billion euros’ worth of aluminium to the US each year, and the commission estimates Trump’s tariffs could cost some 2.8 billion euros.
As well as making it harder for European metal to find buyers in the US, tariffs could also mean other foreign producers redirect their output to the EU, pushing the market there down. Brussels wants to maximise the political impact of its reprisals on the US while minimising the impact of a trade war on European consumers. European Commission Vice President Jyrki Katainen told AFP on Friday the bloc could form a “coalition of like-minded countries” to file a complaint at the WTO, though this procedure usually takes around two years.
