The Office of the U.S. Trade Representative (USTR) indicated plans to impose tariffs on goods coming from the European Union (EU) which are scheduled to take effect beginning October 18. The new duties on EU ag products come in response to the World Trade Organization (WTO) ruling in favor of the U.S. to allow additional tariffs on $7.5 billion of European goods.
The WTO ruled that the U.S. is entitled to impose punitive tariffs in response to a longstanding dispute over subsidies that were given to the European aircraft manufacturer Airbus. Some of the new tariffs include a 25 percent tariff on coffee coming from Germany as well as a 25 percent duty on single-malt Irish and Scotch whiskeys. The plans also call for a 25 percent tariff on butter, yogurt and specific pork products from multiple EU countries. A 25 percent tariff will also be imposed on olives, olive oils, multiple varieties of cheese, as well as various fruits and juices from several European countries. The increased tariffs will also cover multiple different types of industrial goods from various EU countries.
The USTR has requested a meeting with the WTO on October 14 to request approval for the proposed tariff increase as an appropriate countermeasure against the EU. Representatives from several European countries that will be impacted by the tariff increase have issued various responses. German Chancellor Angela Merkel appeared to acknowledge the WTO ruling as legitimizing the move to impose additional tariffs on EU ag products. Spanish representatives have expressed hope for reaching some type of agreement before the tariffs are set to take place.
Although the EU was found to be at fault by the WTO, the EU’s Commissioner for Trade Cecilia Malmström appears to disagree with the U.S. plans to increase tariffs. “The U.S. opting for applying countermeasures now would be shortsighted and counterproductive,” said Malmström. “If the U.S. decides to impose WTO authorised countermeasures, it will be pushing the EU into a situation where we will have no other option than do the same.”