European Interest

EU warns Trump trade wars are ‘easy to lose’

Flickr/La Tête Krançien/CC BY-NC-ND 2.0

The European Union will target American products like peanut buetter, orange juice and bourbon whisky in a “proportionate response” to US President Donald Trump’s planned tariffs on steel and aluminium imports.

Trump announced last week that the US would impose a 25% tariff on steel imports and a 10% tariff on aluminium. On March 3, Trump tweeted threatening to place “a tax” on European cars that “freely pour into the US” if the EU further increased tariffs.

On March 7, the European Commission warned that thousands of jobs are at stake and presented its own strategy to respond.

As reported by Deutsche Welle, Germany’s international broadcaster, European Council President Donald Tusk hit back at Trump.

“President Trump has recently said, and I quote, ‘trade wars are good and easy to win’ but the truth is quite the opposite. Trade wars are bad and easy to lose,” Tusk told a press conference in Luxembourg.

Tusk warned Trump that the tariffs could result in “a serious trade dispute” between Washington and the rest of the world.

As for EU trade commissioner Cecilia Malmström, she stressed that a full-on transatlantic trade war was “not in anybody’s interests”.

“A trade war has no winners,” Malmström told reporters after the European Commission, which handles trade matters for the bloc, discussed the tariffs.

However, after meeting with Swedish Prime Minister Stefan Lofven at the White House on March 6, Trump said: “We’re doing tariffs on steel. We cannot lose our steel industry. It’s a fraction of what it once was. And we can’t lose our aluminium industry”.

In a separate report, the Agence France-Presse (AFP) noted that EU leaders are slated to hold an emergency debate on the issue at a summit in Brussels on March 22-23.

Meanwhile, European Commission chief Jean-Claude Juncker has 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, written in the dry language of customs regulations, does not mention specific businesses.

The list, obtained by AFP, includes “mens’ or boys’ trousers and breeches of cotton denim” and “motorcycles including mopeds” with engines of 500 cc capacity and above – which includes most Harley Davidson models.

Sweetcorn, cranberry juice and peanut butter are all on the list along with cigarettes, cigars and playing cards.

In response to Juncker’s warning, Harley-Davidson issued the following statement: “Import tariffs on steel and aluminium will drive up costs for all products made with these raw materials, regardless of their origin. Additionally, a punitive, retaliatory tariff on Harley-Davidson motorcycles in any market would have a significant impact on our sales, our dealers, their suppliers and our customers in those markets.”

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.

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