Before the European Commission negotiated details of the trade retaliatory measures against the United States, a detailed list of retaliatory tariffs has already been placed on the table of Chairman Juncker.
The total amount of this list is close to 2.8 billion euros, and the EU has set a 25% tax rate for retaliation. These include T-shirts, jeans, cosmetics, motorcycles, yachts and other consumer goods worth about EUR 1 billion; agricultural products worth about 951 million euros, such as orange juice, bourbon and corn; and steel and other industrial products worth about 854 million euros. . seamless steel pipe
The European Commission estimates that if this list of trade retaliations were to be implemented, the effect would be equivalent to half of the losses incurred by the EU due to the high tariff imposed by the Trump administration. And this list does not require World Trade Organization (WTO) arbitration and can take effect within 90 days of the official opening of the customs action in the United States.
Implementing political countermeasures against the United States
In order to exert pressure on the United States, the list elaborately listed by the European Union is indispensable for political considerations: Harley’s motorcycle headquarters is located in the home of Speaker Paul Ryan's hometown of Wisconsin; Bourbon's main producing area is Senate Majority Leader Mitch McConnell. Mitch McConnell is based in Kentucky; Levi's apparel is headquartered in San Francisco and is the constituency of Democrat House leader Nancy Pelosi.
The EU’s plan has achieved some results. Ryan has publicly expressed that he is extremely worried about the consequences of the trade war and urged Trump to abandon the tariff plan.
At the same time, if Trump finally decides to impose a 25% tariff on imported steel and imposes a 15% tariff on imported aluminum, the EU also plans to continue expanding the scope of punitive tariff products on the United States.
Part of the reason why the EU is doing such a big move is that once countries like Canada and Mexico that are closer to the United States get some form of tariff exemption, then EU countries such as Germany and France will eventually become the real victims.
According to data from the US Department of Commerce, from January to November 2017, the largest number of steel exports to the United States was in the order of Canada, Brazil, South Korea, Mexico, Russia, Turkey, Japan, Germany, and India.
However, the European Union has always believed that Canada and Mexico will be exempted from the United States by means of the North American Free Trade Agreement (NAFTA).
Trump's statement left a gap, that is, if the new NAFTA version is satisfied with the United States, Canada and Mexico may be exempt.
However, Mexico is currently tough to say that if it insists on imposing tariffs on Mexican steel products, then Mexico will respond to heavy taxes on American products, implying that punitive tariffs will be levied on those goods from the constituencies that support Trump.
One view is that Trump’s move was to try hard to please the United States’ more than 80,000 steel workers before the mid-term elections, but reports from a trade partnership, a think-tank consisting of U.S. agencies and economists, showed up. Trump's implementation of high tariffs has more harm than good, because each additional job in the steel and aluminum industry will lose more than five jobs in other manufacturing industries.
Specifically, 33,000 jobs will be added to the steel and aluminum industries, 180,000 job opportunities will be reduced in other economic sectors, a net decrease in employment will be 146,000, and industries with reduced employment will be mainly distributed in the manufacturing sector, such as motor vehicles. And parts manufacturing.
EU also continues to trade barriers
The EU’s steel workers and their lobby groups are even more powerful: At present, there are about 300,000 people in the EU working in the steel industry. The size of the steel industry accounts for about 1% of GDP, and the annual sales of steel products are about 170 billion euros.
Therefore, the EU that opposed U.S. trade protectionism actually did not abandon its trade barriers imposed on steel products. The European Union announced on the 6th that it will extend the anti-dumping duty imposed on China's stainless steel seamless steel pipes by 5 years and collect 48.3% of the total. 71.9% of anti-dumping duties.
In December 2011, the EU had finally imposed anti-dumping duties on Chinese stainless steel seamless pipes and other products. In December 2016, after the expiration of the five-year anti-dumping duty, the EU again initiated an anti-dumping review.
The head of the Trade Relief and Investigation Bureau of the Chinese Ministry of Commerce once stated that the root cause of the European steel dilemma lies in the lack of economic growth, not the impact of Chinese products. China expresses great concern and concern over the protectionist tendency of the EU in the steel field.
According to EU data, the EU has so far implemented a total of 53 anti-dumping measures against imported steel products, 27 of which involve Chinese steel products, accounting for 50% of the total.
Steel tariffs are counterproductive
In addition to escalating global trade retaliation, according to historical experience, Trump's tariff actions will also cause the downstream companies of the US steel industry to suffer economic blows, and ultimately it will be difficult to boost the economy.
Gary Cohn, the head of the White House National Economic Council, left his post on the 6th due to strong dissatisfaction with customs actions. On the eve of his departure, he is still making a final effort: People familiar with the matter claim that Cohen plans to convene executives of downstream companies in the US steel and aluminum industry in March. He met with Trump at the White House on the 8th to convince Trump to abandon the plan.
Goldman Sachs stated in a recent report on the 6th that import tariffs will make raw material prices and downstream industries in the United States less competitive and cause significant economic impact on Canada, Mexico, and the European Union, rather than other countries. Goldman Sachs believes that this is the irony of implementing this trade protection measure: a tariff designed to support U.S. industry may eventually benefit only a small part of the producers, at the cost of putting the overall economy at a disadvantage.