Price of many products exported to the United States from the European Union have increased because of the tariffs imposed by Washington.
Following the ruling by World Trade Organization in favor of the US earlier this month, Washington imposed tariffs on products from the EU worth $7.5bn which came into effect just after midnight in Washington DC on 17 October. The WTO ruling was in connection with a 15 year old trade dispute over illegal government subsidies by the US and the EU to Boeing and Airbus respectively. The WTO panel found both the parties guilty and had initially awarded the US the right to levy tariffs on EU imports while it is expected that the EU will also be awarded the same verdict at the beginning of next year.
Washington took advantage of this ruling and imposed tariffs of up to 25 per cent on many of the goods exported there from the EU.
While the $7.5bn worth of goods could appear to be a very small part of the total EU exports to US which touched a total of $684bn last year, this attitude of the US has created concerns among suppliers and buyers.
It will also impose tariffs on US imports starting next year because it has no other option, the EU says, when the WTO awards it the ruling.
Cheese is one of the main products of the EU that is facing the US tariff burden. Most of the cheese ranging from Italian Pecorino, British Stilton to Dutch Edam, will be affected by the tariffs, barring a few exceptions. Compared to the home-grown American variants, European cheeses have become more popular in the US. There has been stockpiling of European cheese by American sellers during the last few months in anticipation of the imposition of US tariffs on the products.
Wine is another European product that is to face US tariffs and would be applicable on wines from France, Germany, Spain and the UK, excluding Italy. About 32 per cent of the total wine exports from the EU were accounted for by US exports 2017.
French wine had been singled out earlier by the US President Donald Trump. He promised to “do something” about a trading arrangement that he claimed was “not fair”. “France charges us a lot for the wine. And yet we charge them very little for French wine,” he told US media inn June.
“So the wineries come to me and say, ‘Sir’ – the California guys, they come, ‘Sir, we’re paying a lot of money to put our product into France, and you’re letting’ – meaning, this country is allowing – ‘these French wines, which are great wines, but we have great wines too – allowing it to come in for nothing. It’s not fair’. “And you know what? It’s not fair. We’ll do something about it.”
Single malt Scotch whisky are also hit by the US tariffs.
In 2018, Scotland exported about $1.3bn of Scotch to the US in 2018 according to the Scotch Whisky Association (SWA). That also includes almost 25 million bottles of single malt Scotch.
“Jobs could be at risk” at Scottish distilleries because of the tariffs warned SWA chief executive Karen Betts. “In time, consumer choice will diminish and Scotch whisky companies will start to lose market share,” she said. “In Scotland and throughout our UK supply chain, we expect to see a dropping-off in investment and productivity.”
Another EU product to face the brunt of the tariffs is Spanish olive oil and is believed to impact thousands of olive-growing families in Andalusia, southern Spain, the largest olive industry in the world.
Cashmere jumpers and tailored suits have also been targeted by the US.
(Adapted from BBC.com)