The European Union won’t sit idly by if the United States moves forward with President Trump’s proposed steel tariffs—and Levi’s jeans could take a hit from the region’s retaliation.
Last week Trump proposed implementing a 25 percent tariff on foreign steel imports and 10 percent on aluminum. Since then, global markets have been in an uproar with some countries threatening trade wars, though Trump is calling those trade wars “good” and “easy to win.”
The president is expected to make a final decision on implementing the proposed tariffs by the end of this week.
On Monday, EU trade commissioner Cecilia Malmström said while the EU is awaiting a final decision, it’s also poised to act.
“The taxes on aluminum and steel would be erroneous,” Malmström told the BBC. “So we will of course, possibly with others, take this decision to the WTO. We are also looking at safeguard measures on our own steel and aluminum, and yes, we are looking at possibilities to retaliate, meaning that we will also put tariffs on U.S. imports to the European Union.”
The EU has reportedly already compiled a draft list of U.S. goods to tax, which Malmström told the BBC could include 25 percent tariffs on as much as $3.5 billion worth of U.S. imports, including iconic items like Levi’s jeans, Harley-Davidson motorcycles and Bourbon whiskey. The 28-member bloc is expected to respond to the United States’ tariffs as a single unit.
Levi’s isn’t on board with any of it.
The denim brand told the BBC, “We support open markets and free trade where everyone plays by the rules. Unilateral tariff impositions risk retaliation and destabilizing the global economy, in which case American brands, workers and consumers will ultimately suffer.”
It’s tit-for-tat on trade these days, it seems.
Ahead of Malmström’s Monday comments, Trump wrote on Twitter Saturday: “If the E.U. wants to further increase their already massive tariffs and barriers on U.S. companies doing business there, we will simply apply a Tax on their Cars which freely pour into the U.S. They make it impossible for our cars (and more) to sell there. Big trade imbalance!”
China, Canada, Mexico and Brazil are among the nations that have already promised to retaliate if the U.S. moves forward with the steel and aluminum tariffs. Each are among the top 10 providers of steel to the U.S. with the exception of China, which has still been the clear target of the tariffs.
The back and forth on trade barrier threats has the World Trade Organization on high alert.
“In light of recent announcements on trade policy measures, it is clear that we now see a much higher and real risk of triggering an escalation of trade barriers across the globe. We cannot ignore this risk and I urge all parties to consider and reflect on this situation very carefully,” Director-General Roberto Azevêdo said speaking at a WTO member meeting on Monday. “Once we start down this path, it will be very difficult to reverse direction. An eye for an eye will leave us all blind and the world in deep recession. We must make every effort to avoid the fall of the first dominoes. There is still time.”