EUROPE – The EU, in what Bloomberg News terms as ‘retaliatory’ tactic against President Trump’s steel and aluminium tariff threat, is planning to impose tariffs on US iconic brands including a 25% levy on a number of consumer, agricultural and steel products.
Among them are food and agricultural imports from the US such as Kentucky bourbon whiskey, corn, rice, beans, orange juice, peanut butter, cranberries among others.
In what seems like a fresh trade war, the EU is targeting US$3.5 billion of American goods, about US$1.17 billion earmarked for food and agricultural produce.
The current trade wars disrupt EU’s and US’s duty-free access to each other’s markets while affecting gross domestic product, domestic economic costs and jobs.
The trade restrictions have received opposition not only from the World Trade Organisation (WTO) but also in the US marred with complaints from exporters.
“However, exports grew 28 percent in 2017 over 2016 to 9,287 metric tons at a value of US$26,792,358.
We certainly hope that this trade dispute can be avoided, like most of US agriculture, we have made our views known to our government officials in the hopes that this situation can be amicably resolved,” said Patrick Archer, President of the American Peanut Council to FoodIngredientsFirst.
Wisconsin State is said to produce more than half the world’s supply of cranberries while US which exports 40% of the crop, ships more than 95 million pounds of cranberries a year to the EU.
With the tariffs, Tom Lochner, executive director of the Wisconsin State Cranberry Growers Association noted that there will be too much fruit and low prizes, something that will make growers incapable of competition in the market.
If implemented, the tariffs will disrupt global supply chains, increase cost of foods and beverages and affect economic growth.
The Grocery Manufacturers Association (GMA) in a letter proposed adoption of a product exclusion process that enables food, beverages and consumer product manufacturers and suppliers to seek exclusions on packaging materials that have no national security application.
The trade organisation noted that increase in costs of food and beverages will affect all Americans but mostly consumers who rely on shelf-stable canned products especially fruits and vegetables.
According to Bloomberg, the measures were discussed in a meeting with the Brussels-based commission, the EU’s executive arm and Europe may expand the list of goods to be affected.
The retaliatory actions are due to be discussed by the EU commission leadership who are planning to file a complaint to the WTO against the US and raise ‘safeguard’ measures.
While US views the tariffs as national security measure, EU says they are being used as an economic tool that violates international trade rules.
“The European Union has been particularly tough on the United States,” said Trump.
“It’s been a very, very unfair trade situation.”
EU and US trade wars dates into the past when EU adopted measures to protect its steel industry and in 2002, US under the leadership of George W Bush proposed similar tariffs but withdrew after WTO pronounced them illegal.