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Report: EU could target US shirts, shoes, cosmetics on retaliatory tariff list

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Report: EU could target US shirts, shoes, cosmetics on retaliatory tariff list

The European Commission will potentially target a broader group of American products worth roughly $3.46 billion, ranging from cosmetics and clothing to boats, in retaliation for U.S. tariffs on steel and aluminum imports, Reuters reported March 6.

The informal list, which was previously reported to include a 25% tariff on Harley-Davidson Inc. motorcycles, Levi Strauss & Co. jeans and Kentucky bourbon, now could include U.S.-made shirts, textiles, footwear, cosmetics and recreational boats, Reuters reported, citing a briefing the European Commission gave to the European Union and its 28 member countries on March 5.

According to the report, the European Commission is now splitting its intended tariffs on U.S. products into several lists, including one category that came to light March 6 encompassing clothing and cosmetics and valued at $1.24 billion. The food and beverages category, including bourbon whiskey, corn and orange juice, is valued at a little less than $1.24 billion, according to the report.

Europe's trade leaders are scheduled to meet March 7 to formally discuss retaliatory measures, according to Politico.

President Donald Trump on March 1 stated his intention to impose a 25% tariff on all U.S. steel imports as well as a 10% tariff on all U.S. aluminum imports, an announcement that sparked concern from U.S. steel and aluminum producers as well as producers of consumer products that could either be forced to raise prices or be targeted in retaliation from a number of countries.

The report sparked concerns from a number of industry trade groups.

Steve Lamar, executive vice president of the American Apparel & Footwear Association, said in an interview with S&P Global Market Intelligence that the European Union represents the second-largest export market for apparel and footwear, second only to Canada. Retaliatory tariffs would run counter to the Trump administration's objective of making American companies more competitive, Lamar said, adding that he has never seen a global trade environment as hostile as the current one.

"Were we expecting this? No," Lamar said. "But we've been down this road before. What it shows is there are no winners in a trade war."

Of the $2.3 billion total of U.S. apparel exports to the world in 2017, the EU represented nearly $300 million, according to the American Apparel & Footwear Association. U.S. domestic exports of blue jeans to the EU reached a little more than $25 million in 2017, making it the second-largest export market for the product behind Canada.

"We don't make a lot in the U.S. but what we do make, we export," Lamar said. "The stuff we produce here we do tend to sell abroad. So we're very jealously protective of our export markets. We like them and want to keep them and grow them. The thought that the U.S. government is inviting other countries to impose tariffs on our products by going down this path is nauseating to us."

Francine Lamoriello, executive vice president of global strategies for the Personal Care Products Council, a trade group representing cosmetic manufacturers, distributors and suppliers, said U.S. manufacturers export roughly $3 billion annually to the EU, which also includes products exported by European-owned companies with American manufacturing facilities.

"International trade is a critical component to the success of our industry and significantly contributes to our ability to expand manufacturing and employment, and support other industries such as advertising, packaging, and transportation," Lamoriello said. "Our industry is strongly opposed to any increases in tariffs affecting US-EU trade."

Matt Priest, president and CEO of the Footwear Distributors and Retailers of America said in an interview that although none of the footwear industry's top-10 export markets are in Europe, the broader impact of tariffs on consumer products could drive up supply chain costs across the board, which could limit disposable income for consumers, effectively limiting spending on footwear in the U.S.

"At first glance, it's obviously concerning," Priest said. "Any kind of retaliation is concerning."