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EU to Impose Trade Sanctions Against US

The European Union is set to impose unprecedented retaliatory tariffs against the United States from today in a bid to end tax breaks given to US exporters.  

The US tax break, known as the Foreign Sales Corporation, was ruled by the World Trade Organization in 2000 as an illegal trade subsidy. The EU, after winning the WTO approval last May, has warned it will phase in sanctions on US exports unless US Congress repeals the tax breaks.

 

Under its sanctions plan, the EU is to impose tariffs from today, March 1, starting at 5 percent and increasing monthly up to 17 percent, unless a new law is enacted.

 

That means US companies will have to pay an estimated US$16.6 million in March, rising to US$46.4 million by December for a total of US$315 million in additional duties by the end of the year.

 

The trade dispute between America and Europe has been a war of words so far with tariffs threatened but not imposed. Analysts warned that the EU's move will change the pattern of trans-Atlantic trade relations.

 

The retaliation is to hit a wide array of American agricultural and manufactured goods ranging from buckwheat to nuclear reactor parts.

 

(CRI.com March 1, 2004)

EU Threatens Trade Retaliation Against US in Tax Row
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