EU slaps tariffs of €2.9bn on American products

Tax will apply to products from whiskey and motorcycles to peanuts and cranberries

European Commission president Jean-Claude Juncker says the decision by the United States to impose trade tariffs "goes against all logic" as the EU look set to impose tariffs of €2.9bn on American products in response. Video: Oireachtas TV


EU tariffs on €2.9 billion in American products, from motorcycles and whiskey to peanuts and cranberries, will kick in for goods imported to the Republic from midnight on Friday, Revenue has confirmed.

The retaliatory measure comes after the US imposed tariffs on steel and aluminium products from around the globe, and on Friday there was a further threat from US president Donald Trump of a 20 per cent tariff on European car imports.

“The US is abusing the tariff methods and starting trade wars all around the world,” said Cecilia Malmstrom, the EU’s trade commissioner. She acknowledged that the EU had targeted some iconic American imports for tariffs, such Harley-Davidson motorcycles and bourbon, to “make noise” and put pressure on US leaders.

Pressure is also being placed on ordinary businesses, however, such as Waterford Harley-Davidson dealer, Lenny Burns, who said business is “in limbo”.

“We don’t know what the retail price is going to be, we don’t know at what point the tariff comes in in the pricing structure,” said Mr Burns, who bought his first Harley-Davidson motorcycle in 1980.

The Waterford outlet has an order of new bikes coming in July, but “anything coming after that point of July, we’re not quite sure of, we can’t even price to a customer now,” he added.

“If your product goes up . . . and your competitor product is still at the same price, it’s a no-brainer for someone; they can go and buy a Honda or a BMW-manufactured bike within the same market,” Mr Burns said.

“We could have closed the doors here in the recession, we’re starting to come out of it and it’s like a kick in the teeth to us.”

Point of import

Revenue confirmed on Friday that the tariffs apply at the point of import into the Republic, not to goods already on Irish shelves or in showrooms.

John Murphy, a senior vice-president at the US Chamber of Commerce, estimates that $75 billion (€64 billion) in US products will be subject to new foreign tariffs by the end of the first week of July.

As painful as the brewing trade war could prove, many have seen it coming. Mr Trump ran for the presidency on a vow to topple seven decades of American policy that had favoured ever-freer trade among nations.

Late last month, he proceeded to infuriate US allies, from the EU to Canada and Mexico, by imposing tariffs of 25 per cent on imported steel and 10 per cent on aluminium.

But the highest-stakes fight still looms – in two weeks, the US is to start taxing $34 billion in Chinese goods. Beijing has vowed to immediately retaliate with its own tariffs on US soybeans and other farm products in a direct shot at Trump’s supporters in America’s heartland.

– Additional reporting: PA/Reuters