The European Commission has developed a proposed list of select U.S. products that it plans to retaliate against following President Trump’s decision to place a global tariff of 25 percent on steel imports. On March 6, 2018, the European Commission released a list of items exported from the United States that will be subject to these trade remedies, accounting for $3.5 billion in U.S. exports. While some of these products include many of the same types of steel products subject to the Section 232 steel tariffs, roughly $2.5 billion worth of the products included in the list were added to exert political pressure on Congressional leadership, including agricultural products and various apparel and luxury goods with strong ties to the home districts of some Congressional leaders. The list only covers products that will be subject to retaliation for U.S. steel tariffs under Section 232; a list for products subject to retaliation for aluminum tariffs has not been announced or released at this time.
While the Trump administration considers the Section 232 remedies to be a national security-related trade remedy under U.S. law, the European Commission is treating the Section 232 program as a “safeguard” action. Under World Trade Organization (WTO) rules, the European Union can retaliate against safeguard actions through “rebalancing” measures. It remains to be seen if the WTO will allow this type of retaliatory action by the European Union. If approved, such an action could proceed in 90 days after the United States implements the steel tariff. The European Commission is also preparing safeguard measures of its own to prevent steel imports from third countries diverted by the Section 232 tariffs from flooding the European market.
The proposed EU tariff rate for items covered in the list is 25 percent ad valorem.
Scope of Remedies
The European Commission’s list contains 186 items, with EU Combined Nomenclature (CN) 2018 subheadings, product descriptions, and 2017 import values listed for each product. The European Union’s CN nomenclature is equivalent to the HTSUS nomenclature up to the six-digit level.
For iron and steel products, the remedies will affect 103 products worth roughly $1.1 billion, including certain iron, steel, and steel alloy materials, as well as certain finished goods including appliances, chains, containers, fencing, scaffolding and structural components under subheadings 7210, 7222, 7223, 7226, 7228, 7229, 7301, 7304, 7306, 7307, 7308, 7309, 7310, 7311, 7314, 7315, 7318, 7321, 7322, 7323, 7324, 7325 and 7326.
For apparel, textile and footwear products, the remedies will affect 10 products worth $109.7 million, including certain shirts, trousers, shorts, footwear and bed linens under subheadings 6109, 6202, 6203 and 6204. For selected industrial goods, the remedies will affect 14 products worth $1.2 billion, including certain cosmetics, motorcycles and various categories of boats under subheadings 3304, 8711 and 8903.
For unprocessed agricultural products, the remedies will affect 37 products worth $430.7 million, including certain beans, grains, berries and juices under subheadings 0713, 1005, 1006, 2008 and 2009. For processed agricultural products, the remedies will affect 22 products worth $749.9 million, including certain corn, peanut butter, whiskey and tobacco products under subheadings 0710, 1904, 2001, 2004, 2005, 2008, 2208, 2402 and 2403.