06:19 GMT +325 September 2018
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    EU All Set to Impose Tit-for-Tat Tariffs on US Imports

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    The European Union has announced that it will begin charging 25 percent import duties on a wide range of US products on Friday in retaliation to Washington’s introduction of tariffs on EU steel and aluminum earlier this month.

    The European Commission has adopted a law targeting 2.8 billion euros ($3.2 billion) worth of US goods, from motorbikes and speedboats to denim jeans and cigarettes.

    Clear But Measured Response

    Addressing the Irish parliament, President of the Commission Jean-Claude Juncker stated that Washington’s introduction of tariffs “goes against all logic and history,” and that the EU will do everything to restore the balance of transatlantic trade.

    "The United States' decision to impose tariffs goes against that (trust). In fact it goes against all logic and history. Our response must be clear but measured. We will do what we have to do to rebalance and safeguard.”

    The US commerce secretary, Wilbur Ross, in turn, told CNBC that the US tariffs on imported steel and aluminum have “modified behavior of trading partners and induced international cooperation.”

    READ MORE: German Automakers Call for End to EU-US Car Import Tax — Reports

    In an official press release, EU Commissioner for Trade Cecilia Malmstrom stated that the 28-member bloc was “left with no other choice” when the United States decided to impose 25 percent tariffs on steel and 10 percent on aluminum imports from the EU.

    "We did not want to be in this position. However the unilateral and unjustified decision of the US to impose steel and aluminum tariffs on the EU means that we are left with no other choice. The rules of international trade, which we have developed over the years with our American partners, cannot be violated without a reaction from our side. Our response is measured, proportionate and fully in line with WTO rules."

    At the same time, Malmstrom noted that if the United States were to remove its tariffs, the EU would take symmetric measures.

    ‘US Ripped Off by Friends and Enemies’

    Following the European Commission’s announcement, President Donald Trump promised that the US will no longer “be taken advantage of” and slammed the EU for not allowing American farm products to be sold during a rally in Minnesota.

    “You look at the European Union, they put up barriers so we can’t sell our farm products and yet they sell Mercedes and BMW. The cars come in by the millions and we hardly tax them at all. They don’t take our cars and if they do the tax is massive. So they’re basically saying ‘we’re going to sell you millions of cars, by the way you’re not going to sell us any’. It’s not going to work that way anymore folks. We will not be taken advantage of anymore,” he said.

    The president also claimed that trade was not “reciprocal”:

    “As far as trade is concerned with other countries we want fair and reciprocal trade, we don’t want stupid trade like we had for so long. […] We have been ripped off by almost every country on Earth, our friends and our enemies. But those days are over.”

    Germany’s Bid to Settle the Dispute

    In the meantime, Germany’s leading carmakers appeared to propose abolishing EU tariffs on US cars in an attempt to prevent the escalation and find a peaceful solution to the trade spat.

    The Wall Street Journal reported that German automakers had suggested scrapping the EU’s 10 percent tax on car imports from the States and the 2.5 percent duty on car imports in America. In exchange, they want Trump to ditch the idea of a 25 percent border tax on European vehicle imports.

    According to sources familiar with the situation, US Ambassador to Germany Richard Grenell brought the proposal for a broader industry trade pact to the current administration on Wednesday.

    “Germany has the right approach to resolving this trade disagreement among friends. If the EU were to reduce its 10 per cent tariff on US cars and trucks, that would be a positive first step toward trade that was more fair and reciprocal,” Wilbur Ross told the media outlet.

    Trade disagreements between the US and the EU have intensified since Washington imposed a 25 percent tariff on imported steel and a 10 percent tariff on aluminum imports. Transatlantic relations hit their lowest point after Donald Trump accused his partners and allies of taking advantage of the US in terms of trade following the recent G7 summit.

    Tags:
    trade, Wilbur Ross, Donald Trump, Jean-Claude Juncker, EU, United States
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