Booze and Boeings: Europe sharpens tariff hit list, ramping up trade war with Trump

Sydney Morning Herald

3 days ago

Trump has shifted ground on his deadlines in the past and may do so again on the tariff rate and timing, prompting disagreement among EU members about the scale of their retaliation.
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Sefcovic said he would not walk away from a genuine effort to reach a deal, but he signalled a 'second strand' in the negotiations about new EU tariffs if necessary.
'As I have said before, it takes two hands to clap,' he said this week.
'We must prepare for all outcomes – including, if necessary, well-considered, proportionate measures to restore balance in our trans-Atlantic relationship.'
The EU drafted a list of American products four weeks ago to consider tariffs on annual US exports worth €95 billion, about $170 billion.
This was cut down to a revised list worth €72 billion, or about $128 billion.
The list includes aircraft and aeronautical components, a major threat for Boeing in its competition with European giant Airbus. It also targets bourbon whiskey from states such as Kentucky, where 64.5 per cent of voters chose Trump at the presidential election.
Other products on the list include cars, food, wine, beer and medical devices.
Sefcovic shared the revised list with EU member countries this week, giving them a chance to negotiate changes, but also said he was prepared to do more.
'This does not exhaust our toolbox, and every instrument remains on the table,' he said.
Export powerhouses such as Germany are concerned that retaliatory tariffs would only trigger a reprisal from Trump, who might pile even greater penalties on EU products.
In the auto sector, for instance, the EU has more at stake with its exports than with any penalty it could apply on American products.
While the EU shipped 749,170 new cars to the US last year, the US only sent 164,857 cars in the opposite direction.
In the farm sector, France is concerned that retaliation would trigger White House reprisals against French wine and other high-value exports.
The German Association of the Automotive Industry (VDA) said the situation meant an earlier 27.5 per cent tariff on European cars was still in force until a deal was struck.
'The costs for our companies are already in the billions – and the sum is growing every day,' VDA chief Hildegard Muller said in a comment to this masthead.
'With regard to any countermeasures, it must be ensured that they do not damage our own industry.'
Muller said that two-thirds of the cars shipped from the US to the EU came from German companies – a key fact after German brands invested in American factories.
The peak group for Italian wine exporters, the Unione Italiana Vini (UIV), called the Trump tariff plan the 'darkest page' in relations between Italy and the US.
UIV president Lamberto Frescobaldi said the 30 per cent tariff on wine would push up prices so much that it was 'virtually an embargo' of 80 per cent of the Italian wine exports, costing hundreds of thousands of jobs.
The retaliation is being described in Brussels as a final option if Trump does not give ground on his 30 per cent tariff, but it depends on EU member states holding their nerve.
If some countries fear reprisals from Trump, they may push for carve-outs from the retaliation plan in the hope it would spare their biggest industries from even greater US trade penalties.