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EU Retaliatory Tariffs Moved Up to June 22

Thursday, June 21, 2018
Sandler, Travis & Rosenberg Trade Report

The European Commission adopted June 20 the regulation to implement the European Union’s “rebalancing measures” in response to a June 1 increase in U.S. tariffs on steel and aluminum from EU and other countries. As a result, starting June 22 the EU will impose an additional 25 percent tariffs on a list of products worth €2.8 billion. Affected products include textile, apparel, and footwear items, rice, orange juice, bourbon whiskey, tobacco products, cosmetic products, steel and aluminum products, playing cards, sailboats, and motorcycles.

Trade Commissioner Cecilia Malmström said that the EU “did not want to be in this position” but that “the rules of international trade, which we have developed over the years hand in hand with our American partners, cannot be violated without a reaction from our side.” Malmström defended the EU tariffs as “measured, proportionate, and fully in line with WTO rules” and said they would be removed if the U.S. removes its tariffs.

The Commission notes that the retaliatory tariffs are part of a three-pronged EU response that also includes the June 1 launch of a World Trade Organization case and the March 26 initiation of a safeguard investigation meant to protect the European market from disruptions caused by the diversion of steel from the U.S. market. The EU has also warned that tariffs on another €3.6 billion worth of U.S. goods could be increased by 10 to 50 percent in March 2021 (or sooner, if the WTO case is decided against the U.S. before then) if the U.S. has not rescinded its steel and aluminum tariffs by that time.

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