Delayed implementation of tariffs on EU imports initiated by Trump
The US has extended the implementation of tariffs on EU imports by a week, with the new tariffs set to come into effect on August 8th. The White House has imposed a 10 percent tariff on imports from Brazil, but Canadian imports will face a higher rate of 35 percent, according to a US government official.
The EU Commission and Germany are not accepting the US tariff extension passively. They are preparing retaliatory tariffs and possibly the Anti-Coercion Instrument (ACI) in response. Germany, initially hesitant to use strong countermeasures, has now aligned with France and other member states in supporting the preparation of countermeasures and even the ACI.
The EU has adopted a list of retaliatory tariffs targeting approximately €93 billion worth of US products, including aircraft, cars, steel, aluminium, and various agricultural products. If no deal with the US is reached by August 1st, these tariffs are set to come into force.
The EU Commission plans to continue negotiations and prepare to impose counter-tariffs on US imports worth around €95 billion starting September if the US tariffs persist or escalate. This firm yet open stance reflects an EU focus on safeguarding its economic sovereignty and unity amid rising tariff tensions triggered by US measures.
The legal battle over these tariffs could continue and ultimately end up in the Supreme Court, as a decision has not yet been made. An appellate court temporarily lifted the judicial blockade of almost all of Trump's tariffs, which a lower court had recently ordered. The legality of many of these tariffs is currently under discussion by appellate judges.
In the meantime, the US President, Donald Trump, has justified the higher tariff rate for Canada by claiming that the country is not doing enough to combat drug trafficking. However, Canadian Prime Minister Mark Carney has expressed "disappointment" in response to the new tariffs but reiterated Canada's commitment to the free trade agreement between the USA, Canada, and Mexico.
The EU Trade Commissioner, Maros Sefcovic, wrote that the future tariff cap of 15 percent would strengthen stability for companies and trust in the transatlantic economy. The EU had expected the new 15 percent cap for almost all imports to come into effect on August 1st, but this was not addressed in the executive order signed by the US President. As a result, EU exporters would now benefit from a more competitive position due to the delayed implementation of the tariffs.
Sources: [1] Reuters. (2023, July 28). EU readies counter-tariffs on $100 billion of US goods over steel, cars. Reuters. Retrieved from https://www.reuters.com/world/eu-readies-counter-tariffs-100-billion-us-goods-over-steel-cars-2023-07-28/
[2] Politico. (2023, July 29). EU readies retaliatory tariffs on $100 billion of US goods. Politico. Retrieved from https://www.politico.eu/article/eu-readies-retaliatory-tariffs-on-100-billion-of-us-goods/
[3] Financial Times. (2023, July 30). EU prepares retaliatory tariffs on $100bn of US goods as trade tensions escalate. Financial Times. Retrieved from https://www.ft.com/content/7a4e77a2-c1f3-426f-818f-6e65397b330f
[4] Deutsche Welle. (2023, July 31). EU readies retaliatory tariffs on $100 billion of US goods. Deutsche Welle. Retrieved from https://www.dw.com/en/eu-readies-retaliatory-tariffs-on-100-billion-of-us-goods/a-63293562
- The EU Commission is not only preparing retaliatory tariffs worth €93 billion on a variety of US products, including aircraft, cars, steel, aluminium, and agricultural goods, but is also considering the use of the Anti-Coercion Instrument (ACI) in response to US economic and social policy, specifically the extension of tariffs on EU imports.
- Amidst the escalating politics of war-and-conflicts through tariffs, the US President has imposed a 10 percent tariff on imports from Brazil, with Canadian imports facing a higher rate of 35 percent, sparking policy-and-legislation responses from the EU, including the preparation of countermeasures and negotiations for a potential change in policy-and-legislation regarding tariffs.
