EU Threatens Tariffs on U.S. Products Like Peanut Butter as Trade War Escalates

The European Union outlined a three-pronged response to proposed metals tariffs from President Donald Trump’s U.S. administration Wednesday, mentioning items such as peanut butter, cranberries and orange juice that could see higher charges in Europe, CNBC reports.

Speaking at a press conference in Brussels, Cecilia Malmstrom, the EU’s commissioner for trade, said the institution would take the case to the World Trade Organization and would coordinate its actions with other trade partners that are also against the proposed tariffs from the U.S.

She also said that Brussels has prepared a provisional list of U.S. products that would see higher tariffs from the EU if Trump does indeed move ahead with the import taxes. This list has not been made public, but according to leaks in the media, the EU’s tariffs could amount to 2.83 billion euros ($3.52 billion). Malmstrom revealed that the list is made up of steel, industrial and agricultural products.

“Certain types of bourbon is indeed on the list as are other items, such as peanut butter and cranberries, orange juice, etc,” she said, adding that “very soon” the list will be made public.

Lastly, she said that the EU was getting ready to put safeguard measures in place to prevent metal flooding in the EU, as a result of the tariffs.

“There are indications that President Trump, very soon, in the coming days, we don’t know for sure, may sign-off a decision on import tariffs of 25 percent on steel and 10 percent on aluminum, which he announced on the March. This is done under something that’s called section 232, which refers to internal or national security. We have serious doubts about that justification, we cannot see how the European Union’s friends and allies in NATO can be a threat to national security in the U.S. We find that assumption deeply unjust,” Malmstrom said.

In the eyes of the EU, “the motivation of the U.S. is an economic safeguard measure in disguise, not a national security measure,” Malmstrom added.

“That means the EU is entitled to make use of a WTO safeguard agreement to rebalance benefits that we have given to the U.S. in the past.”

Speaking in Brussels, Malmstrom said “we should be very careful with that word” in reference to the concept of a trade war, The Wall Street Journal says.

“It is very hard to speculate what will happen (in the U.S.)…I truly hope this will not happen. A trade war has no winners. We have no intention of escalating, but can also not just stay silent when such a major measure would be taken to the European economy,” she said about the U.S. tariffs arguing that trade wars would not be anybody’s interest.

The European Union is the first trade partner to present specific steps against the U.S. if Trump moves ahead with steel and aluminum charges. However, Canada has vowed to come up with its own countermeasures. Mexico, China, and Brazil have also said they are considering steps to retaliate.

Brussels plans to challenge U.S. tariffs, possibly with other trading partners, at the World Trade Organization while also enacting WTO-compliant measures to shield European industries from the fallout and levying duties on American products.

A proposed list of items from peanut butter to Harley-Davidson motorcycles and Levi’s jeans prepared by the EU would amount to €2.8 billion ($3.5 billion) in duties when imported to Europe. The overall size of the business affected is relatively small, worth about 2.8 billion euros, or $3.5 billion, in imports, paling in comparison with the nearly €250 billion of goods the 28-nation bloc bought from the United States in 2016. A provisional list of items being targeted ranges from steel to T-shirts, also including bed linen, chewing tobacco, cranberries, and orange juice, among other products.

According to Bloomberg, the European Union voiced mounting concern over U.S. President Donald Trump’s plan to impose punitive import tariffs, as Germany signaled alarm over the resignation of pro-trade Trump adviser Gary Cohn in an emerging trans-Atlantic dispute over protectionism.

“We hope that eventually this initiative from the U.S. side will not be followed through. But it’s also clear that the EU is going to react if these one-sided tariffs are going to be imposed by the U.S.,” European Commission Vice President Valdis Dombrovskis said in a Bloomberg Television interview ahead of a meeting of the European Union’s executive arm to discuss a response to the U.S. plans.

Germany’s outgoing economy minister, Brigitte Zypries, echoed calls for Trump to reconsider his decision, calling the situation “serious” as the government in Berlin seeks to avoid an escalated trade dispute.

While retaliation from Brussels appears limited for now, it could have an impact on American domestic politics, The New York Times says.

“The Europeans have rights, too, to retaliate. The E.U. is concerned that behind it all, there are people in the U.S. administration that don’t care that there might be damage to the international system of rule of law that we have created,” said Peter Chase, a former American diplomat who is now a senior fellow at the German Marshall Fund in Brussels focusing on trade.

The strong negative reaction to Trump’s planned tariffs appears to have had little impact on the president, who insisted this week that he would not back down. While the president left the door open for compromise with allies, tensions are rising in Europe.

“We’ve loaded the guns,” said Charles de Lusignan, a spokesman for the European Steel Association, a lobbying group, “and we’re ready to use them in case the aggression comes.”

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