US and Europe meet with import duties, what will we notice?

• Aïda Brands

  Editor Economy

The trade war with the US seems really started. This morning the American import duties of 25 percent went into steel and aluminum from abroad. The EU responded directly with counter -measures and announced taxes on typical American products such as jeans, whiskey and engines. What will we notice of all those extra taxes?

For a long time it has been speculated whether US President Trump would actually introduce trading rates. Although he threatened with many rates, they were actually only introduced for Chinese products this morning. Early this morning, when the new load on steel and aluminum started at 6 am.

Europe is not completely strange with American import duties. In 2018, Trump once introduced extra rates for steel and aluminum, among others. Then there were only many exceptions. They are not there now.

For example, packaging manufacturer Royal Vaassen was surprised when the company discovered that this time an extra tax is also levied on their products. The company makes specialist aluminum for milk bottle caps, among other things. “Especially for baby milk and special food. The American market is very important to us,” says director Dries Knaapen. “And it is annoying, you can only put the bill with the customer.”

The European Commission calculated that European goods with a value of 26 billion euros are affected by the taxes. According to Global Trade Alert, the watchdog for world trade, the Netherlands is about 1.2 billion euros.

Not all companies are affected equally. For some products there is no alternative in the US. The levy is then very likely to be paid by the American consumer.

Royal Vaassen is not worried in the short term. “You tax it on to the customer and the customer tells us: we will pass it on to the consumer,” said Knaapen director. “But in the long term they will of course ask themselves, can’t I have this made in America? Because it will be expensive. The immediate effect is small, but in the middle to long term there is a great risk that you have the business lost. The sooner this is turned back, the better. “

The EU has therefore also announced import duties to the address of the US this morning. Among other things, extra tax will be paid in Europe on jeans, engines and whiskey in Europe. Here too, the bill will most likely end up with the consumer.

When the same rates applied in 2018, the prices in Europe for Harley Davidsons and Whiskey went up. The extra taxes on American jeans will feel very few consumers. Typical American brands such as Levi’s, Lee and Wrangler no longer have their jeans made in the US.

“They come from, among others, Turkey, Tunisia, Spain, Portugal, Romania and Italy,” says Daan Broekman, co-owner of the Red Store Jeans in Utrecht. “These are countries with relatively low wages and yet are in or close to Europe, so that brands can supervise production.”

Two things that sell Harley Davidsons do not want to respond to the Autovantra today. “Too early,” says one. The European Commission claims to limit the damage to the US’s addresses for the consumer by focusing primarily on luxury products. The European taxes apply from 1 April. It is about 8 billion euros in products.

Perhaps then levies will follow on even more products from the US. In Brussels, for example, products such as textiles, sugar and household appliances. It would then concern goods with a total import value of another 18 billion, with which the EU then puts just as much extra tax on goods as the US.

It is expected to take about half a year before the Dutch consumer will notice something of the taxes, in the form of price increases. That’s because there are still supplies in many warehouses.

The impact of these taxes will therefore not be very large for the time being. There is no fear that Trump may already want to introduce new taxes on all goods from the EU in April. The more taxes are fired back and forth, the greater the consequences for both the European and the US economy.