Following through with threats of retaliation made earlier in the week, the European Union on Tuesday is preparing punitive tariffs on iconic US brands produced in Republican-controlled states as US trade partners try to do anything and everything they can to stymie President Trump push to impose massive tariffs on steel and aluminum imports.
In what would be the second shot fired in a global trade war launched by Trump, the EU’s tariffs would target (a relatively modest) €2.8 billion ($3.5 billion) of American goods, with Brussels aiming to apply a 25% tit-for-tat levy on a range of consumer, agricultural and steel products imported from the US. The list of targeted US goods, which includes motorcycles, jeans and bourbon whiskey, is intended to send a political message to Washington about the potential domestic economic costs of making good on the president’s threat.
The EU’s retaliatory list targets imports from the U.S. of shirts, jeans, cosmetics, other consumer goods, motorbikes and pleasure boats worth around 1 billion euros; orange juice, bourbon whiskey, corn and other agricultural products totaling 951 million euros; and steel and other industrial products valued at 854 million euros. The Brussels-based commission, the EU’s executive arm, discussed the retaliatory measures with representatives of the bloc’s governments at a meeting on Monday evening.
Paul Ryan, Republican speaker of the House of Representatives, comes from Wisconsin, the state where motorbike maker Harley-Davidson Inc. is based. Earlier this week, Ryan said he was “extremely worried about the consequences of a trade war” and has urged Trump to drop his tariff proposal.
Ryan wouldn’t be the only US official to feel the pressure. According to Bloomberg’s strategic hot take, Bourbon whiskey is produced in Senate Majority Leader Mitch McConnell’s home state of Kentucky, while San Francisco-based jeans maker Levi Strauss is headquartered in House Minority Leader Nancy Pelosi’s district.
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