Clothing could become the subject of retaliatory tariffs imposed by the European Union (EU) in response to US President Donald Trump’s proposed tariff on foreign-made steel and aluminium as the Commission today laid out its plans for a re-balancing of global trade, if needed.
Trump last week threatened to impost levies of up to 25% on steel and aluminium imports in a move that would result in significant export costs for European industry.
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In response, European Commission President Jean-Claude Juncker said at the weekend that the EU would impose tariffs on items such as jeans, Levi’s, bourbon, and motorcycles, according to The Times. The tariffs, he said, would remain for “a long period of time”, but it was unclear as to whether certain trading partners would be exempt.
At a press briefing this morning (7 March), European Commissioner for Trade Cecilia Malmström said the EU had “serious doubts” about Trump’s justification for the tariffs. The President has said the import taxes would protect US national security, however, Malmström said she finds the assumption “deeply unjust”.
“From what we understand, the motivation of the US is an economic safeguard measure in disguise, not a national security measure. That means the EU is able to make use of the WTO safeguard agreement to re-balance benefits that we have given to the US in the past.
“This means carrying out measures that match the economic loss suffered by us because of the US move. This is allowed to take place immediately. So we are discussing different US products for which import tariffs can be imposed.”
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By GlobalDataMalmström said the EU was hopeful a larger trade dispute would not evolve as a result but that if the tariffs were imposed, they would be met by “a firm and proportionate response”.
As such, the Commission told press there is a “provisional list” being discussed that is being shared with member states for consultation and will be made public soon.
While there was no mention of clothing items, in particular jeans, Malmström confirmed that the list contained steel products, industrial products and agricultural products. More specifically, she listed certain types of bourbon, peanut butter, cranberries and orange juice.
“We have looked at American products but also where there is an adequate and alternative supply for the EU’s uses, so it wouldn’t hurt European consumers too much,” she explained. “We stand ready to act in a proportionate way according to WTO rules. We need to reduce the very negative impact these measures can have on our economy.”
Levi Strauss, meanwhile, has responded strongly to the BBC with regard to trade barriers. A spokesperson said: “We support open markets and free trade where everyone plays by the rules. Unilateral tariff impositions risk retaliation and destabilising the global economy, in which case American brands, workers and consumers will ultimately suffer.”
The move comes as Gary Cohn resigned as White House chief economic advisor yesterday. The former Goldman Sachs president, who will depart in a few weeks, had strongly opposed tariffs.
The WTO this week urged members to avoid triggering an escalation of global trade barriers, and instead to reflect on the situation carefully.
“An eye for an eye will leave us all blind and the world in deep recession. We must make every effort to avoid the fall of the first dominoes. There is still time,” director-general Roberto Azevêdo told members.
WTO chief warns of escalation in global trade barriers
