BRUSSELS (AFP) - The European Union said on Wednesday (March 7) it would hit flagship United States products including peanut butter, orange juice and bourbon whiskey with counter measures if US President Donald Trump goes ahead with threatened steel and aluminium tariffs.
The blow by Brussels came hours after Mr Trump’s trade offensive brought the resignation of his top economic advisor Gary Cohn, an influential ex-Goldman Sachs banker who fiercely opposed the measures.
EU trade commissioner Cecilia Malmstroem said a full-on transatlantic trade war was “not in anybody’s interests” – a stark contrast from Mr Trump, who last week declared trade wars were “good and easy to win”.
“A trade war has no winners,” Sweden’s Malmstroem told reporters after the European Commission, which handles trade matters for the bloc, discussed the tariffs.
“We should be very careful with that word... there are only losers in that, and that’s why we will respond in a proportionate and balanced way.”
The EU is holding fire on its reprisals as Mr Trump has yet to sign into effect his plan to set tariffs for what he calls unfair competition for US industry, but Ms Malmstroem said a list of products had been drawn up including steel, industrial and agricultural items.
“Certain types of bourbon are on the list as are other items such as peanut butter, cranberries, orange juice,” Ms Malmstroem said.
European Commission chief Jean-Claude Juncker on Friday (March 2) threatened to hit big-name US brands such as Harley Davidson motorbikes and Levi’s jeans with import duties, prompting Mr Trump to fire back a threat to tax cars from the EU.
Despite Mr Juncker’s headline-grabbing threat to iconic US brands, the EU’s hitlist does not mention specific businesses.
Ms Malmstroem said the EU was still trying to persuade Washington not to go ahead with the tariffs, which she said would threaten “thousands of European jobs”.
The EU is also looking at “safeguard” measures to protect its industry – restricting the bloc’s imports of steel and aluminium to stop foreign supplies flooding the European market, which is allowed under World Trade Organisation (WTO) rules.
Mr Trump, elected on a promise to roll back the effects of globalisation on the US economy with an “America First” platform, said on Thursday (March 1) he planned to impose 25 per cent tariffs on steel imports and 10 per cent on aluminium.
Mr Juncker, who on Wednesday met Mr Lakshmi Mittal, the boss of the world’s top steelmaker ArcelorMittal, said last week the
EU would “react firmly” to protect European industry.
Europe exports around €5 billion euros (S$8.16 billion) worth of steel and a billion euros’ worth of aluminium to the US each year, and the commission estimates Mr Trump’s tariffs could cost some €2.8 billion.
As well as making it harder for European metal to find buyers in the US, tariffs could also mean other foreign producers redirect their output to the EU, pushing the market there down.
Brussels wants to maximise the political impact of its reprisals on the US while minimising the impact of a trade war on European consumers.
European Commission Vice President Jyrki Katainen told AFP on Friday the bloc could form a “coalition of like-minded countries” to file a complaint at the WTO, though this procedure usually takes around two years.