MercoPress. South Atlantic News Agency

EU readies list of US goods to be hit by taxes if Trump imposes tariffs

EU Commissioner for Trade, Cecilia Malmström said, “We are looking at possibilities to retaliate, we will also put taxes or tariffs on US imports to the EU”

Motorbikes, whiskey and T-shirts are among the US goods that could be hit by EU taxes if the US imposes import tariffs on steel and aluminum. The EU has drawn up a target list of 100 US goods worth €2.8bn (US$3.5bn), the BBC understands.

The list, which also includes cosmetics, agricultural and industrial goods, was circulated to the 28 EU member governments. EU commissioners are expected to discuss the proposals on Wednesday.

The EU list includes: Bourbon whiskey, orange juice; Jeans, T-shirts; Corn and other agricultural products; Steel and industrial products; Cosmetics, consumer goods, motorbikes and pleasure boats.

Many of the products the EU has in its sights are specifically chosen to have maximum political effect. Bourbon whiskey is produced in Kentucky, the state of Senate majority leader Mitch McConnell.

Orange juice is a key export for Florida, a swing state in the US elections.

Several US companies such as Levi Strauss have already come out strongly against trade barriers. On Monday, it said: “Unilateral tariff impositions risk retaliation and destabilizing the global economy, in which case American brands, workers and consumers will ultimately suffer.”

On Monday, the EU Commissioner for Trade, Cecilia Malmström said, “We are looking at possibilities to retaliate, meaning we will also put taxes or tariffs on US imports to the European Union.”

She said that if the US went ahead and applied taxes to European steel, the EU would take the issue to the World Trade Organization (WTO). Ms Malmström stressed that Europe was looking to respond “to retaliate but not escalate”.

But President Trump has already threatened more retaliation. On Saturday he tweeted:: “If the EU wants to further increase their already massive tariffs and barriers on US companies doing business there, we will simply apply a Tax on their Cars which freely pour into the US.”

Trump has decried the “$800 Billion Dollar Yearly Trade Deficit because of our 'very stupid' trade deals and policies”, and vowed to end it. On Thursday, he said steel imports would face a 25% tariff and aluminum 10%.

US Treasury Secretary Steven Mnuchin repeated that idea before a congressional panel on Tuesday, saying that he expects Mexico and Canada to be exempt from the tariffs, assuming NAFTA negotiations are successful.

Substantial changes to the Nafta agreement are not likely to happen soon, however. The current round of Nafta talks, about updating the 24-year-old treaty, finished on Monday with little progress. Mr Trump has previously threatened to withdraw the United States from the pact.

The US imports steel from more than 100 nations and brings in four times more steel from abroad than it exports. Since 2000, the US steel industry has suffered, with production dropping and the number of employees in steel work falling.

The US is the largest export market for EU cars - making up 25% of the €192bn (£171bn; US$237bn) worth of motor vehicles the bloc exported in 2016 (China was second with 16%).