HEADLINE EU warns Trump on trade war, eyes peanut butter and whiskey tariffs


EU warns Trump on trade war, eyes peanut butter and whiskey tariffs


07:39, March 08, 2018


The EU's top official Wednesday warned US President Donald Trump against starting a trade war, as the bloc prepared to retaliate against Washington's threatened steel and aluminium tariffs with duties on peanut butter, orange juice and bourbon whiskey.

European Union President Donald Tusk said "trade wars are bad and easy to lose", directly rebuffing Trump's claim last week they were "good and easy to win".

Tusk's tough words came after the EU unveiled a raft of counter measures that will hit a huge range of flagship US exports -- from jeans to motorbikes to cranberries -- with duties if Trump acts on his threat to impose heavy tariffs on steel and aluminium.

"President Trump has recently said and I quote, 'trade wars are good and easy to win,'" Tusk told a press conference in Luxembourg.

"But the truth is quite the opposite: Trade wars are bad and easy to lose."

Warning Trump's plans could lead to "a serious trade dispute" between Washington and the rest of the world, Tusk said EU leaders would hold an emergency debate on the issue at a summit in Brussels on March 22-23.

EU trade commissioner Cecilia Malmstroem said a full-on transatlantic trade war was "not in anybody's interests".

"A trade war has no winners," Sweden's Malmstroem told reporters after the European Commission, which handles trade matters for the bloc, discussed the tariffs.

"We should be very careful with that word... there are only losers in that, and that's why we will respond in a proportionate and balanced way."

The European Union is holding fire on its reprisals as Trump has yet to sign into effect his plan to set tariffs for what he calls unfair competition for US industry, but Malmstroem said a list of products had been drawn up including steel, industrial and agricultural items.

"Certain types of bourbon are on the list as are other items such as peanut butter, cranberries, orange juice," Malmstroem said.

European Commission chief Jean-Claude Juncker on Friday threatened to hit big-name US brands such as Harley Davidson motorbikes and Levi's jeans with import duties, prompting Trump to fire back a threat to tax cars from the EU.

Despite Juncker's headline-grabbing threat to iconic US brands, the EU's hitlist, written in the dry language of customs regulations, does not mention specific businesses.

The list, obtained by AFP, includes "mens' or boys' trousers and breeches of cotton denim" and "motorcycles including mopeds" with engines of 500 cc capacity and above -- which includes most Harley Davidson models.

Sweetcorn, cranberry juice and peanut butter are all on the list along with cigarettes, cigars and playing cards.

- 'Thousands of jobs' -

Malmstroem said the EU was still trying to persuade Washington not to go ahead with the tariffs, which she said would threaten "thousands of European jobs".

US Commerce Secretary Wilbur Ross appeared to give some hope for resolution on Wednesday, telling the CNBC cable network that Washington did not want a trade war.

"We're not looking for a trade war," Ross said. "We're going to have sensible relations with our allies."

The EU is also looking at "safeguard" measures to protect its industry -- restricting the bloc's imports of steel and aluminium to stop foreign supplies flooding the European market, which is allowed under World Trade Organisation (WTO) rules.

Trump, elected on a promise to roll back the effects of globalisation on the US economy with an "America First" platform, said Thursday he planned to impose 25 percent tariffs on steel imports and 10 percent on aluminium.

Juncker, who on Wednesday met Lakshmi Mittal, the boss of the world's top steelmaker ArcelorMittal, said last week the EU would "react firmly" to protect European industry.

Europe exports around five billion euros' ($4 billion) worth of steel and a billion euros' worth of aluminium to the US each year, and the commission estimates Trump's tariffs could cost some 2.8 billion euros.

As well as making it harder for European metal to find buyers in the US, tariffs could also mean other foreign producers redirect their output to the EU, pushing the market there down.

Brussels wants to maximise the political impact of its reprisals on the US while minimising the impact of a trade war on European consumers.

European Commission Vice President Jyrki Katainen told AFP on Friday the bloc could form a "coalition of like-minded countries" to file a complaint at the WTO, though this procedure usually takes around two years.

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