The European Union (EU) is to hit back at the United States with its own tariffs, targeting a range of goods from US soybeans, to steel, oranges, chainsaws and washing machines.
The EU plans to charge import duties of up to 25 per cent on a number of products sold from the US, in the bloc’s initial response to massive tariffs on global trade introduced by US president Donald Trump.
The European Commission is now planning a further package of tariffs, beyond the measures EU states are due to vote to approve on Wednesday. It would take a qualified majority of EU leaders voting against to rescind the proposed levies. The European commission is the EU’s executive arm that formulates the bloc’s trade policy,
The list of US products and goods that are to be hit with tariffs by the EU has been the subject of intense lobbying between national capitals over recent weeks.
Bourbon, wine and US dairy products had been in the firing line, but France, Italy and Ireland lobbied hard against their inclusion, over fears their domestic spirits and agricultural industries would in turn be drawn into the middle of the EU-US dispute.
Mr Trump had warned that if the EU taxed bourbon, he would respond by putting 200 per cent tariffs on Irish whiskey, French champagne, Italian wine and other European spirits.
The Government had also been concerned about Ireland’s large exports of butter to the US, if Mr Trump was angered by tariffs put on US cheese.
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The final list of products the EU plans to raise tariffs on includes soybeans, almonds, an extensive range of steel and clothing products, as well as motor-powered boats. The EU will also target US exports of oranges, poultry, sausages, raspberries, kitchenware, door and window frames, and non-alcoholic beer.
The tariffs, which are effectively taxes to import goods, will range from between 10 and 25 per cent.
The EU had been drawing up this initial package of counter-tariffs since Mr Trump announced tariffs of 25 per cent on imports of steel and aluminium from the EU and elsewhere in mid-March. Those were followed by similar US tariffs on imports of automobiles and car parts.
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Then came Mr Trump’s sweeping levies on nearly all trading partners last week, which saw the president hit EU states with blanket 20 per cent tariffs on imports to the US.
The European Commission had drawn up the range of US products to hike trade levies on. EU states will now vote to approve the retaliatory measures on Wednesday.
The tariffs will impact about €21 billion worth of US trade with the EU. Initially some €26 billion worth of trade had been in the commission’s crosshairs. However, it reconsidered import duties on bourbon and other products, on foot of lobbying from capitals.
Barry Cowen, a Fianna Fáil MEP, said the decision to not tariff US bourbon and dairy was welcome. The final list of US products set to be subject to tariffs would be “less economically disruptive” to EU states, while still putting pressure on the US to negotiate.
The series of tariffs announced by Mr Trump will raise the cost of importing €380 billion worth of goods into the US from the EU.
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Commission officials are examining a number of options, which include targeting the trade of services – such as the output of US tech and social media giants – as well as goods.
The Government is opposed to dragging US tech multinationals into the fray, given the high concentration of the companies with European bases in Dublin.
Commission officials continue to stress that the EU wants to cut a deal with the US, to end the cycle of tit-for-tat tariffs Mr Trump has kicked off.
