Import Duties: In the food sector, higher prices could soon be noticeable

Peanut butter, jeans and whisky – the EU's counter-tariffs are now in force on US products. The effects could also be felt by consumers in Europe.

Import Duties:   In the food sector, higher prices could soon be noticeable

The import of certain products from United States into European Union is now subject to punitive duties. While Members of European Parliament are in favour of counter-measure, representatives from industry and retail trade warn of consequences of customs duties that European consumers could also feel.

Martin Wansleben, chief executive officer of German industrial UndHandelskammertags (DIHK), expressed his concerns to Stuttgart-based newspaper and StuttgarterNachrichten: "The German upturn Stehtaktuell on test." The trade conflict with US represents one of biggest risks to growth of German economy, said Wansleben. Currently, fewer goods have been exported than expected. The DIHK corrected its forecast for economic growth this year, from 2.7 percent to 2.2 percent.

Penalties could also have consequences for consumers, said Matthias Händle, president of Foreign Trade Association of German retail trade. "In food sector, higher prices could soon be noticeable, because margins are particularly low here." In order to avoid price increases for consumers, trade will, as far as possible, be evaded by suppliers from or countries. Moreover, according to Händle, competitive pressure in German trade prevents "higher import costs being passed on to consumers one-to-one".

With tariffs on products from USA, EU is responding to US President Donald Trump's imposed levies on steel and aluminium products from Europe. EU punitive tariffs of 25 per cent apply to rice, maize, steel products, ships and boats from USA, but also to products of symbolic character such as Harley Davidsons, peanut butter, jeans or whisky. Overall, import duties were worth about 2.8 billion euros.

If US government were to take back order of punitive duties, EU would also reverse this step, EU Trade Commission announced on Wednesday. The introduction of EU tariffs in response to us tariffs had been assessed by Commission as fundamentally necessary: "Those who trample over decades of established partnerships must not count on our understanding", Bernd Lange (SPD), chairman of Committee on International Trade, said.

Updated Date: 22 June 2018, 12:02

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