EU slaps $200m trade sanctions on US imports

Times Online ^ | November 05, 2003 | BY AFP IN BRUSSELS

[akbaines]

The European Commission today announced that it would slap tariffs worth hundreds of millions of dollars on American imports.

The move could see EU member states impose $200 million (£120m) of duties on American products coming into the bloc beginning in March 2004.

The trade sanctions are an attempt by the commission to overturn a US corporate tax scheme that allows American firms to benefit from reduced export taxes.

The tax scheme, known as the Foreign Sales Corporation (FSC) scheme, was ruled illegal by the World Trade Organisation (WTO) in January 2002 as it was seen as giving an unfair advantage to American exporters.

A spokeswoman for the commission said that duty would rise by $40 million (£30m) a month if US authorities did not repeal the scheme.

Arancha Gonzalez, spokeswoman for Pascal Lamy, the EU Trade Commissioner, said: "The faster the US acts, the less the measures will bite."

The WTO ruled in January last year that the FSC law flouted its rules by allowing thousands of US firms operating through subsidiaries in offshore tax havens to benefit from reduced export taxes.

The WTO pointed out that the EU could impose tariffs of $4 billion (£2.4bn) if the FSC system was not dismantled by the end of 2003.

That penalty would have been an unprecedented sum which threatened to undermine trade relations between the EU and US yet further, after a range of disagreements over American steel subsidies and the EU ban on GM foods.

Ms Gonzalez said: "We have opted for this measured but responsible approach which gives the US a last chance to comply."

"We want to give a last chance to the US legislative procedure. But March 1, 2004 will be cast in stone when the Council of Ministers adopts this proposal."

M Lamy, on a visit to Washington yesterday, urged the US Congress to repeal the FSC to avoid the sanctions on its exports.

Ms Gonzalez added: "The signs we've got from Congress are encouraging. We hope this will be done and sanctions can be avoided. But this should focus the minds of US legislators."

[akbaines]

Interesting goings ons

[milan]

Slap a friggin tariff on BMW, Braun, and VW and see how long this lasts...oh yeah, and the cheese and wine that France exports.

[Viva Le Dissention]

Yes, that's brilliant. Ahhh...what we need is another trade war. I've always thought the Depression built character.

[Bonaparte]

"Slap a friggin tariff.."

The only tariffs or sanctions that will hurt them are the ones "passed" by you and me and every American who is sick and tired of everything European.

[w1andsodidwe]

This is all about the EU trying to over rule US law. We can't give them that power.

[longtermmemmory]

and yet they give france a pass for EU sanctions there.


Selective enforncement by socialists.

[templar]

I've always thought the Depression built character.

Have to agree. Seems to me that the generation that came out of the depression had far greater character than the generation that preceeded or followed it.

[RWR8189]

If its a trade war they want, its a trade war they get.

[Bonaparte]

"This is all about the EU trying to over rule US law. We can't give them that power."

We don't need to. The USSC already has. Read their decisions. European law and custom are mentioned endlessly, even though they have absolutely no bearing on any matter before that court.

[Gritty]

So, lemme get this straight.

We're all for "free trade" here and want to let the world take all our businesses to their countries while allowing them to export here from their slave-labor countries unrestricted and without tariffs. And now these Euroweenies want to slap tariffs of us because one of their rump courts have declared us in some sort of technical WTO violation!!??

Screw 'em. The Constitution allows Congress to set tariffs. Let's get moving and start working for our own interests instead of those of the rest of the blood-sucking world!

[Norse]

You slap more tariffs on their stuff, they will just retaliate once again. This tit-for-tat garbage was started by Bush when he slapped on steel tariffs.

[greasepaint]

The surrender-monkeys have their 'VAT export rebate'.
Why is the US rebate any different?

[RS]

"You slap more tariffs on their stuff, they will just retaliate once again."

... and the governments will care because why ?....

... a tariff is a tax against their OWN people for buying our stuff - kind of like their government trying to create a boycott against our goods, and raking in more cash when their people will not boycott it.

High tariffs help governments, not people.

[corkoman]

my bmw was built in Spartenburg, So. Carolina

[bert]

I thought FSC's were pretty much out of vogue?

[Spirited]

Meanwhile American goods are cheaper for them since the dollar is slowly sinking into the mire. The Euro has risen 28% against the dollar since last Christmas.

[RS]

The Euro has risen 28% against the dollar since last Christmas."

But then again the Euro is about where it was when it first came out.

[Norse]

>High tariffs help governments, not people.

Maybe temporarily, until the economy crashes because of the tariffs and revenue starts to plummet

[AEMILIUS PAULUS]

Ah yes free trade. Only Americans are stupid enough to buy that quasi-religious argument. Every one else is busy protecting their own workers.

[RS]

"Maybe temporarily, until the economy crashes because of the tariffs and revenue starts to plummet"

I'm confused... OUR economy crashes because they tax THEIR citizens more when they buy our stuff ?

They have an overload of our dollars anyway - trade deficit - so making it more expensive to turn those green pieces of paper into goods hurts us how ?