EU braces for larger costs as US commerce conflict ramps up | EUROtoday

In Brussels, it was simply after 06:00 on Wednesday. But it was midnight in Washington DC when President Donald Trump’s 25% tariffs on metal and aluminium took impact on main US buying and selling companions.

It took lower than 10 minutes for the European Union to reply.

“Tariffs are taxes. They are bad for business, and worse for consumers,” mentioned European Commission President Ursula von der Leyen.

The EU’s preliminary countermeasures will take impact on US merchandise on 1 April, starting from denims and motorbikes to peanut butter and bourbonsimply as they had been with the Trump administration’s first tariffs in 2018 and 2020.

But there shall be extra to return in mid-April. An entire swathe of textiles, dwelling home equipment, meals and agricultural merchandise may very well be included, relying on a two-week session with stakeholders.

An inventory of things virtually 100 pages lengthy is being circulated that options meat, dairy, fruit, wine and spirits, rest room seats, wooden, coats, swimwear, nightdresses, sneakers, chandeliers and lawnmowers.

For customers, larger costs loom on Europe’s grocery store cabinets, particularly for American merchandise. But for companies and a few industries, particularly metal, there’s actual hazard.

The head of Germany’s BGA federation of wholesale, overseas commerce and repair, Dirk Jandura, warned that Germans may need to dig deeper into their pockets to pay for American merchandise within the supermarkets.

Orange juice, bourbon and peanut butter had been the probably merchandise to be hit. “Margins in trade are so low that this cannot be absorbed by the companies,” he mentioned.

In whole, the EU will goal €26bn (£22bn) of US exports.

“We’re not going to go into hypotheticals other than to say we’ve been preparing assiduously for all these outcomes,” mentioned EU spokesman Olof Gill.

António Costa, the EU’s Council President, known as on the US to de-escalate, though there was little signal of that on Wednesday, as Trump vowed to hit again on the EU’s countermeasures.

“We’ve been abused for a long time and we will be abused no longer,” he mentioned.

In Austria too, there was concern concerning the escalation.

“The US is the second most important export market for Austrian products after Germany – and the most important for Germany,” mentioned Christoph Neumayer, who’s head of the Federation of Austrian Industries. It was “essential that Europe acts together and decisively”, he added.

One EU official identified that merchandise akin to soybeans and orange juice might simply be sourced from Brazil or Argentina, so customers wouldn’t be hit too exhausting.

And there was a suggestion that among the US exports focused had been additionally from US states below Republican management: soybeans from Louisiana or meat from Nebraska and Kansas.

A comparatively giant variety of US exports enter the EU through the Dutch port of Rotterdam or Antwerp in Belgium.

Dutch Economic Affairs Minister Dirk Beljaarts mentioned no one stood to learn from a “tariffs war”, however he was hopeful it might not hit his personal nation’s economic system too exhausting: “It has an impact on companies and consumers – particularly consumers in the US.”

One space that shall be hit particularly exhausting on either side of the Atlantic is within the drinks sector.

Pauline Bastidon of Spirits Europe mentioned producers within the EU and US stood united, with dangers going through European corporations that produced US spirits and US corporations that had been closely invested in Europe.

Chris Swonger, of the US Distilled Spirits Council, mentioned that within the three years because the suspension of the EU’s earlier 25% tariff on American whiskey, US distillers had “worked hard to regain solid footing in our largest export market”.

Reimposing tariffs from 1 April was “deeply disappointing” and he known as for a return to “zero-for-zero” tariffs.

For cognac producers in France, the prospect of a 25% US import tax can be a significant downside as most of their produce is for export, both to the US or China.

French producers have already been hit by Chinese measures which have slapped heavy taxes on cognac.

“Morale is down in the dumps,” Bastien Brusaferro of the final winegrowers’ union informed France Info.

Thousands of jobs are at stake within the Charente area alone, he says: “Cognac is a product that’s made for export.”

There was a dire warning too from the pinnacle of the European Steel Association, Henrik Adam.

“President Trump’s ‘America First’ policy threatens to be a final nail in the coffin of the European steel industry,” he warned.

Trump’s preliminary tariffs on European metal in 2018 noticed EU metal exports to the US fall by greater than 1,000,000 tonnes, and for each three tonnes of metal that didn’t enter the US, two-thirds of it entered the EU as an alternative.

“These new measures imposed by Trump are more extensive, therefore the impact of the US tariffs is likely to be far greater.”