European Union tariffs on U.S. products have gone into force

Anna Jefferson
June 22, 2018

Now, the world is punching back.

The EU's retaliatory tariffs against the USA came into force this morning, affecting products such as bourbon whiskey, jeans, motorbikes and orange juice. India and Turkey have already targeted USA products, ranging from rice to autos to sunscreen.

Trump has also imposed tariffs on other trade partners as well, slapping another 25 per cent tariff on $50 billion worth of Chinese goods last week.

His threat - which if carried out would represent a serious escalation of the burgeoning trade war - comes hours after new European Union tariffs on goods imported from the United States came into force.

The biggest exporters of cars to the US are Canada and Mexico, followed by Japan and Germany. The rhetoric is already intensifying. Indian-U.S. trade relations are thorny even in the best of times, analysts say, with the United States pushing for market access and voicing concerns over intellectual property rights while India wants protections for its citizens on foreign worker visas.

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Canadian Prime Minister Justin Trudeau this week said the integration of the auto industry in the USA and Canada means he has "a hard time accepting that any leader might do the kind of damage to his own auto industry that would happen if he were to bring in such a tariff on Canadian auto manufacturers", Reuters reported.

The 28-nation EU was first expected to do so only next month but EU Trade Commissioner Cecilia Malmstrom said they would introduce "rebalancing" tariffs on about 2.8 billion euros' ($3.4 billion) worth of U.S. products this week.

Malmström added that if the US removes its tariffs, the European taxes would also be lifted.

Lim said: "This is going to escalate, with the United States especially looking at German cars".

Those personally in the line of fire are among the most concerned. European Commission spokesman Alexander Winterstein said the EU's response is proportionate and reasonable. "It's going to hit customers, that's for sure". They totally rely on us, which is fine with me.

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Trump ran for the presidency on a vow to topple seven decades of American policy that had favored ever-freer trade among nations.

"The US is abusing the tariff methods and starting trade wars all around the world". He is also targeting European Union auto imports with a United States probe now underway.

The European Union will start imposing duties on a list of USA products as of Friday in response to President Donald Trump's decision to slap tariffs on steel and aluminium imports from Europe.

For Americans, new auto tariffs would likely mean higher car prices for both imported and domestically manufactured vehicles. So even if the United States and China are having this battle, trade diversion means what may happen is that many of their market groups will be dumped on other markets to ensure that they don't overconsume or overproduce. China's tactics range from forcing American companies to hand over technology in exchange for access to the Chinese market to outright cyber-theft. The White House has invoked the same rationale in assessing tariffs earlier this month on steel and aluminum imports. MORE, Trump's former top economic advisor said last week the president had expressed an interest in only having cars in the US that were made here. Bejing will respond in kind.

"No, because the U.S. is both an important export market and a strong production base for us", Mattes said.

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The Commerce Department is allowing companies to request exemptions from the steel and aluminum tariffs - if they can show that the metals they need aren't available from Americans producers. It expects to employ 2,000 people initially, eventually bringing the workforce up to 4,000, according to its website.

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