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BRUSSELS – The European Union (EU) is preparing to implement counter-tariffs on a diverse range of U.S. products next month, reflecting concerns over U.S. trade policies under President Donald Trump. The list of goods targeted for these tariffs includes everyday items such as dental floss, bourbon, and even luxury items like diamonds. This strategy specifically aims to influence voters and businesses in Republican states, challenging the current administration’s trade decisions.
The European Commission has announced plans to impose additional duties on U.S. imports worth approximately €26 billion ($28.4 billion) as a retaliatory measure against Trump’s reinstated tariffs on steel and aluminum. These tariffs, which had initially been imposed at a rate of 25%, encompass not only raw materials but also semi-finished and finished products, thereby broadening their impact on a variety of industries.
Responding to U.S. Tariffs
The backdrop of this situation is the U.S. government’s recent reinstatement of tariffs on both finished and semi-finished steel and aluminum products. Washington has also raised the tariff rate on aluminum from 10% to 25%, removing several exemptions while extending these tariffs to a wider array of products that use these metals, including cookware, furniture, and various machinery.
The EU’s initial response to these tariffs dates back to 2018 when it enacted duties on €2.8 billion worth of U.S. goods in retaliation for the estimated €6.4 billion impact of U.S. tariffs on EU steel and aluminum exports. Further tariffs amounting to €3.6 billion were scheduled to be applied three years later but were postponed as part of a temporary truce reached with President Joe Biden’s administration.
This truce is set to expire on March 31, which will automatically trigger the re-imposition of these tariffs on U.S. products starting April 1. The targeted items include steel and aluminum, as well as other goods such as bourbon, motorcycles, and orange juice.
The EU predicts that the U.S. tariffs will have a significant effect on €8 billion worth of EU exports in steel and aluminum. The current countermeasures have been adjusted to correspond to €4.5 billion, a reduction attributed to the United Kingdom’s exit from the EU and a fall in U.S. imports of the specified products.
Details of the EU’s Tariff Plans
The proposed tariff rates range significantly, from 10% to as high as 50%. The latter rate would be applied to products like dishwashers, washing machines, and various textiles. The tariffs on bourbon, motorcycles, and motorboats could also jump to 50%.
Moreover, the Commission is considering a separate list of U.S. imports estimated at €21 billion, which it intends to refine to €18 billion before imposing further tariffs on April 13. Potential targets from this list include poultry, dairy, cereals, alcoholic beverages, and various consumer goods including glassware and dental care products.
EU officials have indicated that the targeted items are intended to carry symbolic weight, deliberately selected to minimize adverse effects on the EU while strategically focusing on states that predominantly support Republican policies. For instance, products associated with major agricultural producers, such as soybeans in Louisiana and meat in Nebraska, may receive special attention.
Impact on U.S. Companies
This broad approach to tariffs aims to pressure U.S. businesses to advocate for a reevaluation of the ongoing trade conflict. Key American companies that could face repercussions include Whirlpool, Stanley Black & Decker, Mohawk Industries, Ralph Lauren, Tyson Foods, and Archer-Daniels-Midland.
In the coming weeks, the Commission will solicit feedback from businesses and stakeholders regarding its proposed tariffs. A definitive list will be established for review by the 27 EU member states, with finalized tariff applications expected by April 13, unless a significant opposition arises from member nations.
Furthermore, EU officials have indicated the possibility of expanding the value of U.S. imports subject to tariffs up to the full €26 billion, aligning with the scope of the U.S. measures, as negotiations progress.
(1 USD = 0.9159 EUR)
Source
finance.yahoo.com