The European Union fought back against the Trump administration’s tariffs, by slapping penalties on an array of American products that target the President’s political base, like bourbon, motorcycles and orange juice, The New York Times informed.
The European counterattack on $3.2 billion of goods, a response to the administration’s measures on steel and aluminum imports, adds another front to a global trade war that has already seen China and Mexico retaliate with their own tariffs, and Canada, Japan and Turkey preparing similar offensives.
The risk of escalation is high since Trump has promised even more tariffs – taking aim at German car manufacturers. The President has started an investigation into automobile imports to determine whether they pose a national security concern, the same justification used for his metal tariffs.
“You look at the European Union. They put up barriers so that we can’t sell our farm products in. And yet they sell Mercedes and BMW, and the cars come in by the millions. And we hardly tax them at all,” Trump said in front of a crowd in Duluth, Minn., on Thursday.
Washington is fighting from a position of strength, with the American economy on track for one of its strongest years in a decade, The Times notes. Europe doesn’t have the same defenses, as growth in the region is slowing, and that weakness has been compounded by political turmoil in Italy and Germany, as well as Britain’s decision to leave the European Union.
However, although Trump has sought to exert pressure on other countries, the global nature of supply chains means the tit-for-tat tariffs are ricocheting in unexpected ways and may ultimately cost jobs in the United States. Sales of Mercedes SUVs, made in Alabama by the German automaker Daimler, could be hit by the American trade dispute with China, and Swedish manufacturer Volvo faces rising prices on the imported steel it uses at its Mack Truck factory outside Allentown, Pa.
The European Commission applied its sanctions more than a week earlier than expected, in what analysts said was a show of strength.
“It’s a signal that the EU is striking back and taking this seriously,” Holger Schmieding, chief economist at Berenberg Bank in London, told NYT.
As Trump pursues a nationalistic agenda, leaders in Europe and elsewhere are eager to demonstrate that they will continue to dismantle barriers to commerce, with or without the United States. Cecilia Malmstrom, the European commissioner for trade, was in New Zealand on Thursday negotiating a free-trade pact with the government there, the latest in a series of treaties signed or in the works, including ones with Japan, Canada and Australia.
“We did everything we could to avoid this situation, but now we have no choice but to respond. The EU has a responsibility to stand up for open global trade,” Malmstrom said in a speech in Wellington, New Zealand.
The new slate of European tariffs focuses on products that tend to be manufactured in Republican strongholds: whiskey and playing cards from Kentucky, recreational boats from Florida and rice from Arkansas, The Times notes.
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