US president Donald Trump threatened new tariffs on products from the European Union (EU) in retaliation to the bloc’s $1 billion (€890 million) fine of Google earlier this week.
Trump in a social media post said the US would launch a trade investigation “into the practice of ‘ROBBING’ American Companies and, in turn, the American Taxpayer.”
“The penalties will be entirely reversed and, we anticipate, a substantial TARIFF to be placed on them at the earliest possible moment,” Trump posted.
Trump has frequently made tariff threats against the US’s largest trading partners, and has followed through on some of them while retreating from others.
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The European Commission on Thursday fined Google a total of €890 million for breaching the bloc’s digital rule book, saying Google gave preferential treatment to its own services, including shopping, hotel, transport and sports results, over those of third parties in its search engine.
The European Commission had said earlier on Friday a new 10 per cent tariff rate the United States will levy on trade coming from the European Union will be “all-inclusive”, meaning businesses will pay a lower rate than they were charged previously under a deal signed last year.
The US has announced tariffs of between 10 per and 12.5 per cent will apply to 80 countries, in the latest twist in US President Donald Trump’s chaotic trade policy, in effect replacing a stopgap blanket tariff that had been due to expire shortly.
The US administration has been searching for increasingly legally creative ways to reinstate Trump’s sweeping tariff agenda, following a US supreme court decision striking down the basis he had used to justify his “Liberation Day” duties imposed on most of the globe at the start of his second term.
Several months ago US trade envoy Jamieson Greer signalled plans to prop up a new set of tariffs on EU states and scores of other countries. At the time the administration planned to justify the new duties by turning to the 1930 Tariff Act, which bans the import of goods produced by “forced or indentured” labour.
However, the levies announced late on Thursday were based on a separate piece of legislation, section 301 of the Trade Act of 1974, which is intended to penalise countries that engage in forced labour, on the basis it gave their businesses an unfair edge.
EU states, Mexico, India, Canada and the UK will now be subject to a 10 per cent tariff, while other countries will face a 12.5 per cent tariff when businesses sell into the US market.
[ Trump imposes sweeping round of fresh tariffs on more than 80 countriesOpens in new window ]
Trump has charged steep tariffs, which are taxes on imports, on nearly all of America’s trading partners, in an attempt to gain leverage over governments and force overseas production back to American soil.
Washington and Brussels had struck a deal last summer to cap tariffs imposed by the Trump administration on exports coming from European countries at 15 per cent.
The agreement was seen as a necessary evil at the time by European governments, to avoid risking a destabilising transatlantic trade war.
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The European Commission, the EU’s powerful executive that negotiated that tariff deal, said the new 10 per cent rate announced by the Trump administration this week was an “all-inclusive tariff”.
“The EU notes positively the fact that this outcome is in line with the US tariff commitments agreed under the EU-US joint statement,” the commission’s trade spokesman Olof Gill said.
Another commission official said the changes meant the EU exports would “benefit” from tariffs at the same rate, or lower, compared to the duties that applied last year.
[ Key facts about Trump’s new tariffs on more than 80 countriesOpens in new window ]
However, the Brussels-based administration “did not agree” with the premise underpinning the new levies, given the EU had passed strict regulations to prevent forced or slave labour, a commission spokeswoman said.
Minister for Foreign Affairs and Trade Helen McEntee said the Government would undertake “a detailed review” of the legal notice issued by the US setting out its new tariff regime.
“These new tariffs confirm that the US will apply a 10 per cent all-inclusive tariff on EU goods exported to the US and are in line with the commitments under the Turnberry agreement, which includes an all-inclusive ceiling of 15 per cent,” she said.
McEntee said the EU would separately push to expand a list of products exempt from US tariffs, which at present includes aircraft and plane parts, cork and generic medicines.
The Government has been keen to secure a carve out to shield whiskey and spirits from the hiked up import taxes, a demand shared by the French and Italian governments keen to protect wine growers and exporters. Additional reporting by Bloomberg
