Saturday

29th Jul 2017

EU ready to challenge US border tax

  • A US border tax may trigger a global trade war (Photo: dawvon)

The European Commission says it is prepared to take legal action against US plans to impose a border tax.

“If somebody is behaving against our interests or against international rules in trade then we have our own mechanisms to react,” Jyrki Katainen, the EU commission vice-president for jobs and growth policy, told the Financial Times in an article published on Monday (13 February).

Thank you for reading EUobserver!

Subscribe now and get 40% off for an annual subscription. Sale ends soon.

  1. €90 per year. Use discount code EUOBS40%
  2. or €15 per month
  3. Cancel anytime

EUobserver is an independent, not-for-profit news organization that publishes daily news reports, analysis, and investigations from Brussels and the EU member states. We are an indispensable news source for anyone who wants to know what is going on in the EU.

We are mainly funded by advertising and subscription revenues. As advertising revenues are falling fast, we depend on subscription revenues to support our journalism.

For group, corporate or student subscriptions, please contact us. See also our full Terms of Use.

If you already have an account click here to login.

The US move to subject imports to tax and exempt export revenues is seen as one possible way, according to the White House, to finance Donald Trump's wall on the border with Mexico.

Any such border tax is also likely to face stiff resistance at the World Trade Organisation (WTO) and possibly trigger a global trade war.

Katainen said he wanted to avoid any such scenario with the US but was prepared to take action.

“We have all the legal arrangements within EU, but we are also part of global arrangements like the WTO and we want to respect the global rule base when it comes to trade," Katainen told the FT.

European businesses could see an up 20 percent increase on import tariffs should the US follow through with the proposal.

The Republicans in Congress say the "border adjustability" in the plan does not break WTO rules. They say it is needed to boost investments in the country.

Critics say the tax amounts to an unlawful subsidy on domestic goods in breach of the WTO.

"It has manifest violations which could even justify the use of the expedited procedure for dispute settlement in the WTO," a Brussels-based lawyer Van Bael & Bellis told Reuters earlier this month.

Trump has yet to endorse the proposed reforms, which are still in the early stages.

Greece looking at bond market return

Greece could issue 3-year bonds as early as this week, for the first time in three years, amid mixed signs from its creditors and rating agencies.

Greece to get €7.7bn loan next week

The ESM, the eurozone emergency fund, agreed on Friday to unblock a new tranche of aid as part of the bailout programme agreed upon in 2015.

News in Brief

  1. EU citizens will need registration to enter UK in Brexit transition
  2. Italy weighs up sending navy into Libyan waters
  3. Swedish PM fights for survival amid IT scandal
  4. Poland's Kaczynski vows to continue judicial reform
  5. Werner Hoyer re-appointed as EU investment bank chief
  6. Spanish PM denies knowledge of party corruption
  7. France 'routinely' abuses migrants, says NGO
  8. Swedish government rocked by data scandal

Stakeholders' Highlights

  1. UNICEFReport: Children on the Move From Africa Do Not First Aim to Go to Europe
  2. Counter BalanceOut for Summer, Ep. 2: EIB Promoting Development in Egypt - At What Cost?
  3. EU2017EELocal Leaders Push for Local and Regional Targets to Address Climate Change
  4. European Healthy Lifestyle AllianceMore Women Than Men Have Died From Heart Disease in Past 30 Years
  5. European Jewish CongressJean-Marie Le Pen Faces Trial for Oven Comments About Jewish Singer
  6. ACCAAnnounces Belt & Road Research at Shanghai Conference
  7. ECPAFood waste in the field can double without crop protection. #WithOrWithout #pesticides
  8. EU2017EEEstonia Allocates €1 Million to Alleviate Migratory Pressure From Libya in Italy
  9. Dialogue PlatformFethullah Gulen's Message on the Anniversary of the Coup Attempt in Turkey
  10. Martens CentreWeeding out Fake News: An Approach to Social Media Regulation
  11. European Jewish CongressEJC Concerned by Normalisation of Antisemitic Tropes in Hungary
  12. Counter BalanceOut for Summer Ep. 1: How the EIB Sweeps a Development Fiasco Under the Rug

Latest News

  1. UK and EU stuck on 'philosophy' of Brexit bill
  2. Europe needs a policy for peace in Nagorno-Karabakh
  3. Spain's PM appeals to court over Catalan independence
  4. Senate backs Russia sanctions, setting scene for EU clash
  5. France and Italy quarrel over shipyard and Libya
  6. Corbyn re-opens Labour's single market wound
  7. Visegrad lobby makes food quality an EU issue
  8. EU court could dismiss national borders in cyberspace