Response to DG Trade’s list of countermeasure to Trump’s Tariffs: Trade provocations do not require any response!

Your views and information regarding the EU economic interests in steel and aluminium products originating in the EU that might be affected by a tariff increase, announced by the United States of America on 8 March 2018 and applicable as from 23 March 2018:

 Potential tariffs imposed by the US government on steel and aluminium imports from the EU and other trade partners are bad news for US consumers and manufacturers abroad. Since the Consumer Choice Center represents consumers not only in Europe but also in the United States we see this build-up of trade barriers by the Trump administration with worry. While steel and aluminium are rarely directly purchased by consumers, unintended consequences in the larger value chain will lead to less choice and higher prices for consumers. Experts have already warned about the threat to canned sodas and canned beer (cans are mainly made out of aluminium). An increase of packaging prices will especially hit poorer households as they spend a higher share of their disposable income on consumer goods. We at the Consumer Choice Center firmly believe that trade barriers are bad for consumer choice and consumers’ purchase power. We still hope that these announced measures will be as ephemeral as the planned and revoked anti-dumping tariffs on the Bombardier C-Series.

6.     Your views and information regarding the EU economic interests in the products which could be subject to possible EU commercial policy measures in response to an announced U.S. tariff increase on certain steel and aluminium products originating in the EU, listed in the enclosed document ‘List of Products’:

While the current US government seems to be interested and willing to increase trade barriers, the European Union’s trade policy should follow the paradigm of consumer choice and affordability. The EU has been pushing for free trade agreements with many large trade blocks. Abandoning this policy of more openness and accepting the US’ invitation to join a trade war would be bad for European consumers.

The initial goods mentioned by Mr. Juncker in his Hamburg speech included Kentucky Bourbon, Harley Davidson motorbikes, and Levis Jeans. These are not just strong US brands but also products that are hard to substitute by EU consumers with switching to EU-produced alternatives. New tariffs on US products reduce consumer choice of EU citizens, lower their purchase power (e.g. a 25% tariff on a motorbike would make it much less affordable for future buyers and more expensive to maintain for current buyers that need to purchase spare parts from the same manufacturer), and MOST IMPORTANTLY punish EU consumers for the trade policy of the US government.

Example Bourbon: Bourbon is a drink more and more fancied by bartenders and is included in many cocktails. Adding a 25% tariff on Bourbon would force many bar-owners to either delist Bourbon, buy cheaper Bourbon of a lower quality, increase cocktail prices (an Old Fashioned with Bourbon could easily go from 8 EUR to 10 EUR), and rewrite price lists and menus. Given that trade policy is made by the Commission Eurosceptic groups would have an easy play to blame the EU for this price increase and would hit fertile grounds given that they would actually have a point.

Trade provocations do not require any response:

We recommend the European Commission and DG Trade to take the high road in this trade provocation. Instead of imposing new tariffs the EU should unilaterally drop tariffs on US products. This would increase the purchasing power of consumers in the EU, reduce manufacturing costs for EU industries with suppliers from the US, and stall a looming trade war in its infancy.

7.     Any other relevant input:

Given that we, the Consumer Choice Center, is a trans-Atlantic consumer group we are very concerned about moves on both sides of the Atlantic to impose tariffs and hurt consumers. We firmly believe in consumer choice and stand against any policy measure that increases market prices for consumers. Therefore we actively seek out the dialogue with regulators and policymakers in the EU and the US and hope that the voice of the consumer will be heard in this debate.

mm

About Fred Roeder

Fred Roder has been working in the field of grassroots activism for over eight years. He is a Health Economist from Germany and has worked in healthcare reform and market access in North America, Europe, and several former Soviet Republics. One of his passions is to analyze how disruptive industries and technologies allow consumers more choice at a lower cost. Fred is very interested in consumer choice and regulatory trends in the following industries: FMCG, Sharing Economy, Airlines. In 2014 he organized a protest in Berlin advocating for competition in the Taxi market. Fred has traveled to 100 countries and is looking forward to visiting the other half of the world’s countries. Among many op-eds and media appearances, he has been published in the Frankfurter Allgemeine Zeitung, Wirtschaftswoche, Die Welt, the BBC, SunTV, ABC Portland News, Montreal Gazette, Handelsblatt, Huffington Post Germany, CityAM. L’Agefi, and The Guardian. Since 2012 he serves as an Associated Researcher at the Montreal Economic Institute.