U.S. to Impose $116.8 Million in Tariffs on European Imports
With no end in sight to an escalating trade battle, the Clinton administration said Monday that it will impose $116.8 million in tariffs aimed at punishing European countries for their ban on U.S. beef treated with growth hormones.
The U.S. identified a hit list of products from France, Germany, Italy, Denmark and other members of the European Union that have shut their doors to the treated U.S. beef since 1989. It includes ham, truffles, goose liver, tomatoes, chocolate and dozens of other products that usually are of more interest to chefs than to trade warriors.
Yet the 100% duties are an explicit retaliation for European policy: They are designed to knock the European products off American grocery shelves, and they add to simmering trade issues ranging from Chiquita banana exports to a growing U.S. industry of genetically modified foods. The latest tariffs are set to go into effect next week.
“The EU now has more than $300 million in retaliatory tariffs against it,” noted Deputy U.S. Trade Representative Peter Scher, alluding to the banana dispute. “We would hope the EU would see this record as one that undermines the credibility” of the global trading system.
The protracted trade tensions among the world’s economic superpowers come at a delicate time for that very system. The World Trade Organization, which acts as referee in such disputes, has been hobbled by an internal power struggle, even as its officials gird for the largest global trade meeting in years, set for November in Seattle.
U.S. officials, citing an assortment of scientific evidence, have demanded for years that Europe drop its prohibition on the American beef and said Europe was defying a series of WTO rulings by maintaining the ban.
For their part, European officials claimed that legitimate health questions justified their position. They sought to fend off the U.S. sanctions by making a deal to compensate the American beef producers.
“Compensation would be better for all parties--better for European producers but also for U.S. producers and U.S. consumers,” said Leon Brittan, the European Commission’s vice president and acting trade commissioner.
Added another European official: “We kept pushing the compensation idea, but the U.S. never bit. They decided retaliation is better.”
U.S. officials have long challenged the European ban and have gained three favorable decisions from WTO panels going back to 1997. In March, the Clinton administration threatened to impose $900 million in tariffs against European products but sharply reduced the list after WTO arbitrators pegged the annual cost to the U.S. beef industry at $116.8 million.
The list released Monday includes a range of pork products as well as many others, such as mustard, chocolate and glue from France; soups and yarn from Germany or France; and Roquefort cheese, onions, dried carrots and fruit juice from a range of countries.
Britain was spared sanctions because it supports the U.S. position, whereas U.S. officials said they hoped that the list would pressure France, Germany, Italy and Denmark--a major exporter of ham--to reverse their decade-long ban on the American beef.
While U.S. cattle executives had previously said the European ban was costing their industry $500 million annually, rather than the smaller figure found by the WTO, they nonetheless took some satisfaction that any sanctions were imminent.
“This is about access,” maintained Dale Moore, legislative director for the National Cattlemen’s Beef Assn. in Washington. “This is about the Europeans’ using a pseudo-scientific issue to keep our beef out of their market.”
“We know it’s not going to work overnight . . . but we hope this gets their attention,” he added.
Earlier this year, the United States began to collect $194.2 million in punitive tariffs annually on a separate group of European products, including high-end handbags and bed linen, in retaliation for European restrictions on bananas sold by U.S.-based Chiquita and Dole. The U.S. position on bananas has also been upheld repeatedly by the WTO.
Scher, the U.S. trade official, told reporters Monday that the administration is still hoping the EU will relent in both the beef and banana battles and abide by the WTO rulings. Although Europeans have been offended by America’s tough tactics in the trade tiffs, “what we are doing is perfectly within the rules of the World Trade Organization,” Scher said.
