EU Drafts List of US Goods to Target Over New Tariffs

The European Commission is drafting a list of products upon which it could impose heavy taxes to send “a political message” to Donald Trump if the US president follows through on plans to impose tariffs on steel and aluminum, a European source said.

“There will be steel and aluminum products, but also industrial, agricultural and food products as well,” said the source, who added Europe is “ready to act once there is specific confirmation” from Washington, AFP reported.

Trump triggered a furor on Thursday by announcing he would set tariffs of 25% on steel and 10% on aluminum to protect US producers as soon as next week. He did not specify if the tariffs would target specific countries.

The announcement has sparked an outcry among US allies such as Canada, the EU, Mexico and Australia as well as China, the world’s biggest steel producer.

There has been speculation that the EU could target for retaliation products made in states that heavily supported Trump in the presidential election, like Kentucky bourbon and Florida oranges.

The source, who works at the commission, said these products could end up being among those targeted, but that the list has not yet been finalized.

“You have to find a good balance between the political message sent to Trump and the products which we have a need for,” said the source, who added the countermeasures would be taken in conformity with World Trade Organization rules.

In 2002, the EU threatened to tax a range of US products as part of a “steel war” unleashed by the administration of George W. Bush. The list included not just steel products but also orange juice, apples, sunglasses, photocopiers and other goods.

The US backed down before the EU carried out its threat to impose the retaliatory measures.

  IMF Warns US

The IMF has warned that the plans of Trump to impose heavy tariffs on import of steel and aluminum would cause damage not only outside the US, but also impact the American economy.

“The import restrictions announced by the US president are likely to cause damage not only outside the US, but also to the US economy itself, including to its manufacturing and construction sectors, which are major users of aluminum and steel,” IMF spokesman Gerry Rice said, a day after Trump made an announcement in this regard.

IMF, he said, is concerned that the measures proposed by the US will, de facto, expand the circumstances where countries use the national-security rationale to justify broad-based import restrictions.