Thursday

29th Sep 2022

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).

Read and decide

Join EUobserver today

Become an expert on Europe

Get instant access to all articles — and 20 years of archives. 14-day free trial.

... or subscribe as a group

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.

Analysis

Investors in renewables face uncertainty due to EU profits cap

While a cap on revenues from renewables is aimed at redirecting excess profits from low-cost electricity generation back to consumers, analysts and industry groups argue such measures come with risks — and at a bad time.

News in Brief

  1. EU to ban Russian products worth €7bn a year more
  2. Denmark: CIA did not warn of Nord Stream attack
  3. Drone sightings in the North Sea 'occurred over months'
  4. Gazprom threatens to cut gas deliveries to Europe via Ukraine
  5. New compromise over EU energy emergency measures
  6. 15 states push for EU-wide gas price cap
  7. EU: Nord Stream explosions 'result of a deliberate act'
  8. EU okays €21bn Covid-recovery funding for Italy amid concern

Stakeholders' Highlights

  1. The European Association for Storage of EnergyRegister for the Energy Storage Global Conference, held in Brussels on 11-13 Oct.
  2. EFBWW – EFBH – FETBBA lot more needs to be done to better protect construction workers from asbestos
  3. European Committee of the RegionsThe 20th edition of EURegionsWeek is ready to take off. Save your spot in Brussels.
  4. UNESDA - Soft Drinks EuropeCall for EU action – SMEs in the beverage industry call for fairer access to recycled material
  5. Nordic Council of MinistersNordic prime ministers: “We will deepen co-operation on defence”
  6. EFBWW – EFBH – FETBBConstruction workers can check wages and working conditions in 36 countries

Latest News

  1. Netherlands tops EU social safety net for the poor
  2. New EU rules to make companies liable for their AI failures
  3. Can King Charles III reset the broken Brexit relationship?
  4. Meloni's navy-blockade plan to stop Libya migrants 'unlikely'
  5. Underwater explosions were detected near Nord Stream leaks
  6. EU countries stall new pesticide rules, blame Ukraine war
  7. The UN's Uyghur report must push EU into China sanctions
  8. Russian diamonds ban 'would cost 10,000 jobs', Antwerp claims

Join EUobserver

Support quality EU news

Join us