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Europe prepares to counter US tariffs

European Commission

The United States has struck at least temporary trade deals with the United Kingdom and China, but not the European Union, a once-close ally now preparing to impose counter tariffs on some $106.2 billion (95 billion euros) of U.S. goods, including chemicals, plastics, rubber and processing machinery.

The European Commission, the governing body of the EU's 27 member countries, launched a so-called public consultation for a list of U.S. imports subject to EU countermeasures, if negotiations don't lead to a mutually beneficial outcome and the removal of U.S. tariffs.

The U.S. is imposing a 10 percent tariff on most goods imported from the EU, a 25 percent tariff on steel, aluminum and cars, and it paused another 20 percent tariff on all EU goods for a 90-day period ending July 8.

The EU then paused for 90 days a series of planned countermeasures against U.S. tariffs on EU steel and aluminum imports to allow space for negotiations.

In the meantime, to assess the potential impact of possible rebalancing measures, the European Commission is seeking public input until June 10. Based on the feedback, the commission will finalize its proposal for the adoption of countermeasures.

The Europeans are considering a 218-page list of products to target. There are categories for primary polymers such as polyolefins, PVC, nylon, polyester, polycarbonate, phenolic resins, epoxy resins and polyurethanes; semi-finished products such as sheets, films, polymeric foils and monofilaments; and finished goods along with production scrap and offcuts.

Injection molds, compression molds and additive manufacturing machines also made the list along with natural and synthetic goods in both recycled and processed forms. This includes everything from rubber sheets, profiles, tubes, mats and gaskets to tires, belts and conveyor systems.

The machinery and equipment for processing plastics and rubber also faces European tariffs along with related parts. This includes injection molding machines, extruders, blow molding machines, thermoformers, machines to process reactive resins and foam products, size-reduction equipment and mixers for rubber and plastics.

The EU is preparing to take these steps to defend its consumers and industry, according to European Commission officials, who say the U.S. tariffs are raising costs for business, stifling growth, fueling inflation and heightening economic uncertainty.

Currently, 70 percent of EU exports to the U.S. worth some 379 billion euros are subject to new and paused tariffs since President Donald Trump took office in January.

"Tariffs are already having a negative impact on the global economies," Commission President Ursula von der Leyen said in a news release. "The EU remains fully committed to finding negotiated outcomes with the U.S. We believe there are good deals to be made for the benefit of consumers and businesses on both sides of the Atlantic. At the same time, we continue preparing for all possibilities, and the consultation launched [May 7] will help guide us in this necessary work."

The commission also is considering restrictions on certain EU exports of steel scrap and chemical products to the U.S. worth 4.4 billion euros in response to the U.S. imposing universal tariffs and tariffs on cars and car parts.

Šefčovič

WTO challenge

In addition, the European Commission will invoke the procedures and provisions of the World Trade Organization's (WTO) dispute settlement system to challenge the U.S. on its universal so-called "reciprocal" tariffs and tariffs on cars and car parts.

The commission remains fully engaged with the United States at both the political and technical levels, according to Maroš Šefčovič, commissioner for Trade and Economic Security.

"From the outset, we have acted with clarity, consistency and a firm commitment to de-escalation. But we will not accept an outcome at any price," Šefčovič said in the release. "That is why we are actively consulting with our member states, industry and stakeholders to prepare for all eventualities. In parallel, we are launching a case at the World Trade Organization to challenge U.S. tariffs that we consider unjustified and in clear breach of global trade rules. The EU stands firm as a steadfast advocate for fair, rules-based international trade."

After the commission submits its request for WTO consultation, the EU and the U.S. will have up to two months to agree on a solution. If the two parties fail to reach an agreement, the EU will have the option of requesting the establishment of a panel to assess the case's merits.

If the parties to the dispute do not manage to reach a mutually agreed solution, the merits of the claims will be examined by an independent appeals panel.

Inking deals

So far, Trump has reached temporary tariff agreements with the United Kingdom and China.

With the U.K., a baseline tariff of 10 percent applies to most U.K. goods entering the U.S and the first 100,000 of U.K. auto imported into the U.S. will be tariffed at 10 percent and not 25 percent.

In addition, U.S. tariffs on U.K. steel and aluminum will be zeroed out.

After trade talks with China, both sides agree to lower tariffs by 115 percent in the short term while retaining the 10 percent tariff.

That means the U.S. will slash tariffs to 30 percent on China.

In return, China will suspend its initial 34 percent tariff on the United States for 90 days but retain a 10 percent tariff during the period of the pause.

* Source : https://www.plasticsnews.com/news/europe-prepares-counter-us-tariffs

* Edit : HANDLER