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Bourbon and Levi's prices to rise as EU enforces tariffs on US Trump threatens car tariffs after EU sets up £200m of levies on US
(about 1 hour later)
The price of bourbon whiskey, Levi’s jeans and Harley-Davidson motorbikes imported from the US will gradually begin rising for British consumers, after the European Union’s retaliatory tariffs on American products came into force. Donald Trump has threatened to widen the mounting trade dispute between US and the EU by imposing tariffs on European cars, after Brussels made good on its threat of retaliatory levies on American products including bourbon whiskey, Levi’s jeans and Harley-Davidson motorbikes.
Adding as much as £200m per year to the cost of consumer goods arriving in Britain from the US, the measures came after Donald Trump imposed additional tariffs on imports of steel and aluminium shipped from the EU. Raising the stakes in the tit-for-tat exchange of import tariffs threatening to spark a global trade war, the US president tweeted in response to the EU tariffs which came into effect late on Thursday: “If these Tariffs and Barriers are not soon broken down and removed, we will be placing a 20% Tariff on all of their cars coming into the U.S. Build them here!”
Brussels imposed the tariffs on consumer goods – designed to target producers in Republican states where Trump draws much of his support – from 10pm on Thursday on US goods worth up to €2.8bn (£2.5bn). Based on the Tariffs and Trade Barriers long placed on the U.S. and it great companies and workers by the European Union, if these Tariffs and Barriers are not soon broken down and removed, we will be placing a 20% Tariff on all of their cars coming into the U.S. Build them here!
The White House refused to exempt its traditional allies from worldwide tariffs on steel and aluminium, which Trump argues are necessary to protect US jobs and industry. Trump’s new threat comes after the EU imposed tariffs on a range of US consumer goods in response to steel and aluminium tariffs from the White House, which could increase the cost of consumer goods by £200m per year in the UK alone.
Should Trump carry through the levy, it would have damaging consequences for jobs and economic growth on both sides of the atlantic. Leaders from both American and European car manufacturers have previously said such measures would lead to net job losses in the US.
Shares in European and US carmakers fell, including Ford and General Motors, as well as Fiat, BMW and Daimler.
The tariffs from Brussels imposedon consumer goods – designed to target producers in Republican states where Trump draws much of his support – were introduced from 11pm (BST) on Thursday on US goods worth up to €2.8bn (£2.5bn).
The White House had refused to exempt its traditional allies from worldwide tariffs on steel and aluminium, which Trump argues are necessary to protect US jobs and industry.
The president is also threatening China with tariffs worth up to $200bn over alleged “unfair” trading practices, amid increasing global tensions that could spiral into a full-scale trade war.The president is also threatening China with tariffs worth up to $200bn over alleged “unfair” trading practices, amid increasing global tensions that could spiral into a full-scale trade war.
The EU trade commissioner, Cecilia Malmström, said this week the 28-nation bloc was left with no other choice but to impose tariffs of its own after the “unilateral and unjustified decision of the US”.The EU trade commissioner, Cecilia Malmström, said this week the 28-nation bloc was left with no other choice but to impose tariffs of its own after the “unilateral and unjustified decision of the US”.
Brussels initially drew up the list of products in March when Trump first floated the idea of 25% tariffs on steel and 10% on aluminium.Brussels initially drew up the list of products in March when Trump first floated the idea of 25% tariffs on steel and 10% on aluminium.
Although American goods already in the UK will not increase in price, shipments leaving the US for Europe from Friday onwards will be charged the tariffs.Although American goods already in the UK will not increase in price, shipments leaving the US for Europe from Friday onwards will be charged the tariffs.
Customs agents across the EU internal market of 500 million people will impose the duty, hiking prices on US-made products in supermarkets and across factory floors.Customs agents across the EU internal market of 500 million people will impose the duty, hiking prices on US-made products in supermarkets and across factory floors.
While the EU tax on imported goods in the UK will be collected by HMRC, with some of those duties staying within the country, the cost for importers, such as wholesale firms and supermarkets, will rise – and is likely to be passed on to consumers.While the EU tax on imported goods in the UK will be collected by HMRC, with some of those duties staying within the country, the cost for importers, such as wholesale firms and supermarkets, will rise – and is likely to be passed on to consumers.
Richard Lim, the chief executive of the consultancy Retail Economics, estimated the tariffs could add £200m to the cost of consumer goods in Britain.Richard Lim, the chief executive of the consultancy Retail Economics, estimated the tariffs could add £200m to the cost of consumer goods in Britain.
“Though the immediate effects on UK retailers might look relatively modest, it is worth paying close attention to this dispute because it’s future course is unpredictable, fast moving and could quickly escalate to engulf other, seemingly unrelated areas of trade,” he said.“Though the immediate effects on UK retailers might look relatively modest, it is worth paying close attention to this dispute because it’s future course is unpredictable, fast moving and could quickly escalate to engulf other, seemingly unrelated areas of trade,” he said.
In 2017, consumers in the UK spent about £406bn on retail purchases.In 2017, consumers in the UK spent about £406bn on retail purchases.
Most economists say the consequence of higher international import tariffs will drive up costs for consumers, offsetting much of the benefit of protecting domestic industries for the country imposing them.Most economists say the consequence of higher international import tariffs will drive up costs for consumers, offsetting much of the benefit of protecting domestic industries for the country imposing them.
Analysts at the consultancy Oxford Economics said the consequences for the European economy could be contained in the short term, as the affected imports only account for about 1% of all goods coming into the EU from the US. The EU will impose an additional €3.6bn of tariffs if the dispute is still active in three years’ time. Analysts at the consultancy Oxford Economics said the consequences for the European economy could be contained in the short term, as the affected imports only account for about 1% of all goods coming into the EU from the US, although warned tariffs on cars would have a greater negative impact. The EU will impose an additional €3.6bn of tariffs if the dispute is still active in three years’ time.
European consumers would be able to find “alternatives”, the European commission vice-president for trade, Jyrki Katainen, said.European consumers would be able to find “alternatives”, the European commission vice-president for trade, Jyrki Katainen, said.
“If we chose products like Harley-Davidson, peanut butter and bourbon, it’s because there are alternatives on the market. We don’t want to do anything that would harm consumers,” he said. “What’s more, these products will have a strong symbolic political impact.”“If we chose products like Harley-Davidson, peanut butter and bourbon, it’s because there are alternatives on the market. We don’t want to do anything that would harm consumers,” he said. “What’s more, these products will have a strong symbolic political impact.”
The real threat would be that the tariffs are a stepping stone towards further escalation in the standoff between Brussels and Washington. Oxford Economics said the consequences could be much greater if Trump imposed tariffs on cars, which leaders from both American and European car manufacturers have said would lead to net job losses in the US.
Lim said: “This is going to escalate, with the US especially looking at German cars. That’s got potential to spiral out of control.”
What US products will be hit by the tariffs?What US products will be hit by the tariffs?
Motorcycles (eg Harley-Davidson)Motorcycles (eg Harley-Davidson)
Peanut butterPeanut butter
Orange juiceOrange juice
CranberriesCranberries
Kidney beansKidney beans
SweetcornSweetcorn
RiceRice
Jeans (eg Levi’s)Jeans (eg Levi’s)
Cigars, cigarettes and tobaccoCigars, cigarettes and tobacco
Bourbon whiskeyBourbon whiskey
Makeup (eg MAC, Estée Lauder, Clinique)Makeup (eg MAC, Estée Lauder, Clinique)
Grilling appliancesGrilling appliances
Yachts (eg Sea Ray cruisers)Yachts (eg Sea Ray cruisers)
Playing cardsPlaying cards
Bed linenBed linen
Knives and forksKnives and forks
SinksSinks
International tradeInternational trade
European UnionEuropean Union
Global economyGlobal economy
European commissionEuropean commission
EconomicsEconomics
Retail industryRetail industry
newsnews
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