US Threatens New Tariffs on $3.1 Billion European Imports
Canada may soon not be the only one targeted by new US tariffs. It appears the US Trade Representative has embarked on a tirade of new house-keeping rules, and wants to impose new tariffs on approximately $3.1 billion worth of exports from EU countries such as the UK, France, Spain, and Germany. The tariffs would target a variety of European goods including beer, gin, olives, and trucks, while other goods such as yogurt, cheese, aircraft as well as luxury goods would be subject to increased duties.
If the US does in fact follow through with the plan, then duties could skyrocket to as high as 100%, thus doubling the price on imported goods or entirely eliminate distribution in the US. German spirits for example, are already subject to a 25% tariff since last year, and with the addition of further import taxes and duties, the demand of German spirits and beer would become significantly reduced.
The new threat of tariffs and increased duties comes amid the continued disagreement between Europe and the US regarding an aircraft subsidy fight. Several years ago, the World Trade Organization (WTO) found both the EU and the US guilty of providing illegal subsidies to their domestic aircraft industries. As a result, the WTO awarded the US with retaliation against the EU’s $7.5 billion worth of exports. Next month however, the WTO will be granting a retaliation award to the EU in a similar manner.
Donald Trump’s trade official, Robert Lighthizer, has stated that the ultimate strategy of increasing tariffs of European goods is to get a settlement agreement with the EU. However, talks between the two have subsided this year, and now the EU is planning to retaliate with further tariffs against various US industries.
Information for this briefing was found via Bloomberg and US Census Bureau. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.
