Bikes, bourbon and T-shirts on EU tax list

Bikes, bourbon and T-shirts on EU tax list
From BBC - March 6, 2018

Motorbikes, whiskey and T-shirts are among the US goods that could be hit by EU taxes if the US imposes import tariffs on steel and aluminium.

The EU has drawn up a target list of 100 US goods worth 2.8bn ($3.5bn, 2.5bn), the BBC understands.

The list, which also includes cosmetics, agricultural and industrial goods, was circulated to the 28 EU member governments on Monday.

EU commissioners are expected to discuss the proposals on Wednesday.

The EU list includes:

Many of the products the EU has in its sights are specifically chosen to have maximum political effect. Bourbon whiskey is produced in Kentucky, the state of Senate majority leader Mitch McConnell.

Orange juice is a key export for Florida, a swing state in the US elections.

Several US companies such as Levi Strauss have already come out strongly against trade barriers. On Monday, it said: "Unilateral tariff impositions risk retaliation and destabilizing the global economy, in which case American brands, workers and consumers will ultimately suffer."

What is the EU considering?

On Monday, the EU Commissioner for Trade, Cecilia Malmstrm, told the BBC: "We are looking at possibilities to retaliate, meaning we will also put taxes or tariffs on US imports to the European Union."

She said that if the US went ahead and applied taxes to European steel, the EU would take the issue to the World Trade Organization (WTO).

Ms Malmstrm stressed that Europe was looking to respond "to retaliate but not escalate".

But President Trump has already threatened more retaliation. On Saturday he tweeted:: "If the EU wants to further increase their already massive tariffs and barriers on US companies doing business there, we will simply apply a Tax on their Cars which freely pour into the US."

What does Trump want to do and why?

Mr Trump has decried the "$800 Billion Dollar Yearly Trade Deficit because of our havery stupid' trade deals and policies", and vowed to end it.

On Thursday, he said steel imports would face a 25% tariff and aluminium 10%.

Then came Saturday's threat on EU-made cars.

In January, he had already announced tariffs on solar panels and washing machines.

What are US's trading partners making of this?

Downing Street said that during Mrs May's call to President Trump on Sunday she raised "our deep concern at the President's forthcoming announcement on steel and aluminium tariffs, noting that multilateral action was the only way to resolve the problem of global overcapacity in all parties' interests."

Has Trump got political support at home for a trade war?

Is there room for compromise?

Is Trump right about the trade imbalance?


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