At issue is a “wide range of US industrial and agricultural goods” that are exported to the EU
The European Commission has proposed a list of US industrial and agricultural goods, worth 95 billion euros to tax if negotiations with Washington do not result, preparing a dispute in the WTO.
“The European Commission has launched a public consultation on a US import list that may be the target of retaliation measures by the EU if ongoing negotiations […] They do not result in a mutually beneficial solution and the elimination of imposed tariffs ”by Washington to community space products, the institution announced on Thursday.
At issue is a wide range of US industrial and agricultural goods that are exported to the EU, in the amount of 95 billion euros.
To these add possible restrictions on certain EU exports to the United States, worth 4.4 billion euros, including steel scrap and chemicals.
At the moment, political and technical negotiations are due between Brussels and Washington, but the EU is already “preparing possible retaliation measures to protect its consumers and industry if negotiations do not have a satisfactory outcome,” the European Commission says in the press release.
Therefore, the EU is already starting a dispute in the World Trade Organization (WTO) against the United States, formally submitting a request for consultation.
“The EU considers unequivocally that these tariffs severely violate the fundamental rules of the WTO. The purpose of the EU is to reaffirm that the agreed international rules must be respected and cannot be unilaterally ignored by any member of the organization, is still indicated.
The public consultation takes place until June 10th.
The announcement comes at a time of marked commercial tensions after Donald Trump’s advertisements for 25% imposition for steel, aluminum and European cars and 20% on reciprocal tariffs to the community, however, suspended for 90 days.
The suspension calmed the markets, which even recorded serious losses, and was greeted and seconded by the EU, which suspended, during the same period and until mid-July, 25% rates to US products in response to those applied by the United States to European steel and aluminum.
The European Commission, which holds the competence of the EU trade policy, has opted for prudence and this caution is supported by countries such as Portugal.
Brussels wants, in this 90 -day break, to be able to negotiate with Washington, and has already proposed zero rates for industrial goods in trade between both blocks.
Currently, 379 billion euros in EU exports to the United States, equivalent to 70% of the total, are subject to new tariffs (including the suspended temporarily) since the new US administration has taken office.
These rates are increasing companies’ costs, locking economic growth, feeding inflation and increasing economic uncertainty.
European Commission calculations report that new US customs rights may imply losses of 0.8% to 1.4% in the US Gross Domestic Product (GDP) by 2027, which is a percentage of 0.2% of GDP for EU.
In the worst scenario, that is, if customs rights are permanent or other contracted, the economic consequences will be more negative, up to 3.1% to 3.3% for the United States and 0.5% to 0.6% for the EU.
Globally, the community executive estimates a 1.2% loss in world GDP and a 7.7% drop in world trade in three years.
