Monday

27th May 2019

EU to impose huge sanctions on US imports

The European Commission has agreed that it will impose massive tariffs on US imports from March 2004 in retaliation to Washington's illegal tax breaks.

In a statement released on Wednesday (5 November) the Commission said that its "proposal is in line with the WTO authorisation ... to apply countermeasures of up to $4 billion following the failure of the US to comply with the WTO rulings".

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The World Trade Organisation ruled in May this year that Washington's tax breaks for exporters were illegal.

If Washington does nothing to repeal the measure, the EU will impose tariffs at the five percent level in March. This will increase by one percent every month up to a ceiling of 17% in March 2005.

Arancha Gonzalez, the Commission's trade spokesperson said: "The faster the US acts, the less the measures will bite".

The penalties will start at around 290 million euro rising by 27 million euro each month. It could eventually reach 614 million euro by March 2005.

The sanctions list is broad, ranging from jewellery, to meat products, to nuclear power plants.

However, the EU is still hoping that things will not reach that stage - partly also because the measures could adversely affect European businesses.

"I have just been to Washington and have clearly explained our position. Still, we have opted for a measured approach and have actually left the door open for US action before countermeasures are to be applied in March 2004. I hope the US will seize this opportunity", said Trade Commissioner Pascal Lamy.

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