Consumers to be collateral damage of EU-US trade dispute

US President Donald J. Trump (L) and German Chancellor Angela Merkel (R) attend the the launch event of the 'Women's Entrepreneurship Facility' within the second day of the G20 summit in Hamburg, Germany, 08 July 2017. [Michael Lukas / EPA]

Harley-Davidson announced on Monday (25 June) it would move some production out of the US to avoid EU tariffs and it might not be the last to do so. That has prompted European consumers’ organisations and importers to warn of the negative impact on consumers.

EU retaliatory measures on US products in response to restrictions on steel and aluminium imports entered into force on Thursday (22 June).

“Tariffs are bad for consumers. While consumers might not automatically benefit when tariffs are cut, they have nothing to gain when they go up,” Johannes Kleis, director of communication of the European Consumers Organisation (BEUC) told EURACTIV.

The European Consumers Organisation welcomed the EU’s approach to launch a settlement case at the WTO.

BEUC called on the European Commission to monitor how the measures affect prices and choices of products for European consumers.

“Consumers shouldn’t be collateral damage of this situation, where the US uses tariffs to obtain concessions of its trading partners,” Kleis stressed.

Trade war rages as EU slaps ‘political’ tariffs on US

The European Union slapped revenge tariffs on iconic US products including bourbon, jeans and motorcycles on Friday in its opening salvo in a trade war with President Donald Trump.

EuroCommerce represents retailers and wholesalers in Europe and they supported the Commission’s decision to retaliate, describing it as “the best thing to do”, as US tariffs violates WTO rules.

“The decision of the European Commission to impose tariffs on U.S. products has not had any immediate impact on us but we are not in favour of any escalation that might lead to a trade war,” Neil McMillan, EuroCommerce’s Director for Political Affairs and Trade, told EURACTIV.

Because “if there is a trade war, everybody is going to have to pay more for everything”, MacMillan warned.

Companies look on how to mitigate the impact

Harley-Davidson is not the only company directly affected by the EU measures. Jeans are among the products targeted, putting Levi Strauss & Co in the line of fire. The company is assessing how this might affect business in Europe.

“While we can’t speculate what this means for future prices, it is important to remember that these tariffs are on U.S.-manufactured goods only. The volume of U.S.-made products LS&Co. imports into the EU is very low,” Levi Strauss & Co spokesperson told EURACTIV.

“We will continue to work with our industry partners and stakeholders to make it clear to the U.S. government and the European Commission how these decisions will impact not just our business but consumers and the millions of people across our supply chain,” the spokesperson underlined.

EU could hit peanut butter, orange juice, whiskey in Trump trade row

The EU warned US President Donald Trump on Wednesday to step back from the brink of a trade war or it would hit flagship US products, such as peanut butter and whiskey.

Bourbon whiskey is also on the list of items struck by the 25% tariffs. In early June, Jack Daniels’ Chief Financial Officer Jean Morreau said that it was “premature to comment” on the potential impact.

“We are on top of the situation and have undertaken measures over the last few months to mitigate risk such as increasing our inventory levels in non-U.S. markets where we own our own distribution,” Morreau said at the time.

“In markets where we own our own route to market,” as it is the case in Europe, “we have a lot more flexibility and control over the situation. In markets where we use third party distributors and this is a little bit more difficult,” Lawson Whiting, Chief Operating Office of the company said in a statement.

One quarter of the companies’ revenues are generated in Europe though.

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