The European Union (EU) on Friday levied tariffs on estimated $3.2 billion worth of American goods, in retaliation for tariffs US President Donald Trump’s tariff imposition on imported steel and aluminium.
EU slapped a 25 per cent tariff on American products such as whiskey, tobacco, Harley Davidson motorcycles, cranberries and peanut butter, reports The Independent.
They also leveraged another 50 per cent tax on select items such as footwear, some types of clothing and washing machines.
On Thursday, Indian imposed tariffs on 29 US goods worth $ 238 million as a countermeasure. The tariffs would come into force on August 4.
The tariffs come weeks after the Trump administration implemented a 25 per cent tariff on steel and 10 per cent tariff on aluminium imports in March.
Trump threatened additional taxes on European cars if the EU chose to retaliate.
The EU has also filed a case with the World Trade Organisation (WTO), claiming Trump’s tariffs were “pure protectionist” and “illegal”.
They also threatened a second round of tariffs on some $4.3 billion worth of US products if the dispute was not resolved.
Mexico has already announced its own tariffs on US goods, and Canada’s tariffs on nearly $13 billion of US products are set to take effect next month.
Trump has also imposed tariffs on other trade partners as well, slapping another 25 per cent tariff on $50 billion worth of Chinese goods last week.
When a trade war happens, it just doesn’t affect the two economies involved but all the economies open to world trade. It comes as no surprise here that India is getting dragged into this.
The basic economic principles of demand and supply come into play. The short supply of one good whether a raw material or finished good, increases the final consumption prices for the end user. Increased tax burden on goods from imposed duties is also carried by the end user.
News credit : Indiatoday