Bourbon, peanut butter, Levi's: EU goes tactical in looming US trade war
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Bourbon, Levi's jeans and Harley Davidson: these are the main products Brussels is threatening to tax in the event of US tariffs on imports of aluminium and steel. The EU did not chose these products by chance.
EU Trade Commissioner Cecilia Malmström on Wednesday added that the EU’s counter-measures would include tariffs on US steel and agricultural products as well as on peanut butter, cranberries and orange juice.
The list is being circulated among members of the EU, the world’s richest trading block.
The EU is currently Washington’s only trading partner to have specified exactly how it will fight back against President Donald Trump’s upcoming trade war.
China and Canada have so far only expressed dismay, while warning Washington that they would not sit idly by.
Political cost for Trump?
On paper, America seems to have a stronger position than Europe: US exports of Bourbon, Levi's and Harley Davidsons to the EU amount to a mere $3 billion while European exports of aluminium and steel to the US amount to $20 billion.
However, what matters most to Brussels is the political cost sanctions would have for the Trump administration. The products the EU has singled out would putatively affect US states led by politicians with strong leverage over Trump.
Bourbon? The specialty and pride of Kentucky, the state led by Republican Senate Majority Leader Mitch McConnell.
Republican House Speaker Paul Ryan’s constituency of Wisconsin houses the world-famous Harley Davidson factory.
And Democrat Nancy Pelosi, the Minority Leader of the US House of Representatives, represents San Francisco, where Levi Strauss jeans are manufactured.
The orange juice strategy
The EU wants to let the US president know that the outbreak of a trade war may be politically damaging for him. The threat is not to be taken lightly. In 2002, during the last trade dispute between the USA and the EU, Brussels had successfully fought against tariffs on European iron exports using the same selective technique. In particular, the EU targeted orange juice produced in Florida – a state whose governor, Jeb Bush, was the brother of then US president George W. Bush.
"We had a lot of fun because we knew it was the kind of situation where we were sure to win," Paul Defraigne, the former chief of staff for the European Trade Commissioner serving in 2002, told Politico.
This article has been translated from the original in French.