EU to Launch Dispute Against U.S. Tariffs

Source Credit : CNBC

The European Union's executive branch announced on Thursday its intention to initiate a dispute with the World Trade Organization regarding the United States' "reciprocal" tariff policy and imposition of duties on cars and car parts.

The European Commission has announced the initiation of a public consultation regarding a comprehensive list of U.S. imports that may be subject to countermeasures in the event that a trade agreement is not reached with Washington. This list encompasses U.S. imports valued at 95 billion euros ($107.4 billion) and includes a wide array of industrial and agricultural products. Among the hundreds of items listed are poultry, grains, and metals.

“It is the unequivocal view of the EU that these [U.S.] tariffs blatantly violate fundamental WTO rules,” the European Commission said in a statement.

"The European Union's primary goal is to emphasize the importance of adhering to internationally agreed-upon rules, which should not be unilaterally ignored by any member of the World Trade Organization, including the United States. As a result, the dispute will be addressed by formally initiating a request for consultations."

During a press conference held on Wednesday, European Trade Commissioner Maros Sefcovic emphasized the European Union's primary objective of negotiating a deal to prevent President Donald Trump's proposed 20% reciprocal tariffs on all imports from the United States. Additionally, President Trump has imposed a 25% tariff on imported vehicles, which has had a significant impact on numerous European automakers. The EU is actively working to address these challenges and find a mutually beneficial solution to avoid further economic repercussions.

In a statement released on Thursday, European Commission President Ursula von der Leyen expressed the EU's unwavering dedication to reaching mutually beneficial agreements with the United States. She emphasized the potential for advantageous deals that would benefit consumers and businesses on both sides of the Atlantic.

The European Union has decided to temporarily suspend the implementation of retaliatory measures that were initially agreed upon by member states in response to the United States imposing a 25% tariff on steel and aluminum imports. This pause has been put in place to allow for negotiations to take place. If these countermeasures were to be implemented, they would specifically target approximately 21 billion euros ($24.1 billion) worth of U.S. goods. These goods would include a variety of products such as agricultural goods and clothing, with tariffs set at a rate of 25%. The decision to pause the implementation of these retaliatory measures demonstrates the EU's commitment to finding a diplomatic solution to the ongoing trade dispute with the United States. By engaging in negotiations, both parties can work towards a mutually beneficial resolution that avoids further escalation of trade tensions.

The United Kingdom is poised to make history by becoming the first country to secure a trade agreement with the United States amidst the ongoing tariff uncertainties. An official announcement is slated for Thursday at 10 a.m. Eastern Time.