Published: Fri, June 22, 2018
Markets | By Josh Butler

European Union retaliatory tariffs on US goods go into effect

European Union retaliatory tariffs on US goods go into effect

Trump hit the EU, Canada, and Mexico with tariffs of 25% on steel and 10% on aluminium at the start of June, ending exemptions that had been in place since March.

Cecilia Malmstrom, the EU's trade commissioner, acknowledged that the European Union had targeted some iconic American imports for tariffs, like Harley-Davidson motorcycles and bourbon, to "make noise" and put pressure on USA leaders.

The EU has also filed a case contesting the legality of the USA tariffs with the World Trade Organization.

The Commission formally adopted a law putting in place the duties on 2.8 billion euros (RM12.9 billion) worth of US goods, including steel and aluminium products, farm produce such as corn and peanuts, bourbon, jeans, and motorcycles. Canada's retaliatory measures begin on July 1, and Mexico and other nations have also announced they will respond.

"We did not want to be in this position".

Canada has announced that it will impose retaliatory tariffs on C$16.6 billion (S$17 billion) worth of USA exports from July 1. "The United States decision to impose targets on Europe goes against that, in fact it goes against all logic and history", European Commission President Jean-Claude Juncker said on Thursday.

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India had sought to be exempt from the new USA tariffs on steel and aluminum, arguing its exports were small in comparison to other countries, but got nowhere.

The European Union will start imposing duties on a list of US products as of Friday in response to President Donald Trump's decision to slap tariffs on steel and aluminium imports from Europe. "Our response will have to be proportionate, reasonable and intelligent".

Trump has also started a trade fight with China over Beijing's sharp-elbowed efforts to overtake USA technological dominance.

After being deferred, the duties on steel and aluminium went ahead on 1 June and affect the EU, Canada, Mexico and other close United States allies. Both sides have promised to impose tariffs early next month on billions of dollars in goods.

However, many lawmakers have expressed concerns that the tariffs will escalate into a trade war that will ultimately hurt American interests.

"The president has been so belligerent that it becomes nearly impossible for democratically elected leaders - or even a non-democratic leader like (Chinese president) Xi Jinping - to appear to kowtow and give in", said Philip Levy, senior fellow at the Chicago Council on Global Affairs and a former White House trade adviser.

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