American companies targeted by the European Union's proposed retaliatory tariffs, following President Donald Trump's decision to impose tariffs on global steel and aluminum imports to the U.S., have millions of dollars at risk as a trade war with countries across the Atlantic heats up.
European Union Commissioner for Trade Cecilia Malmstrom told the BBC on March 5 that the European Union would consider slapping 25% tariffs on a number of U.S. exports to Europe, including jeans, Kentucky bourbon, orange juice and Harley-Davidson Inc. motorcycles, in the wake of President Donald Trump's March 1 announcement that the U.S. plans to impose tariffs of 25% on global steel imports and 10% on aluminum imports.
A list has been drafted, Malmstrom said, and Europe's trade leaders are slated to discuss the counter-tariffs March 7, Politico reported, citing an EU spokesman. However, Germany is looking to avoid such a trade war and is looking to begin trade talks with the U.S., Bloomberg reported March 5.
"We are looking at possibilities to retaliate, meaning we will also put taxes or tariffs on U.S. imports to the European Union," Malmstrom said.
Her comments followed those made by Jean-Claude Juncker, president of the European Commission, on March 2.
"We will now impose tariffs on motorcycles, Harley-Davidson; on blue jeans, Levi's; on bourbon," Juncker said.
The stakes are high for U.S. companies exporting millions of dollars in consumer products to the European Union.
A Levi Strauss & Co. spokesperson said in a statement provided to S&P Global Market Intelligence on March 5 that American companies would suffer as a result of imposed tariffs. Although Levi's has not manufactured in the U.S. in more than a decade, it operates numerous factories in Mexico.
"We support open markets and free trade where everyone plays by the rules," a Levi Strauss spokesperson told S&P Global. "Unilateral tariff impositions risk retaliation and destabilizing the global economy, in which case American brands, workers and consumers will ultimately suffer."
According to its fiscal 2016 annual report, European sales accounted for 24% of Levi's $4.6 billion total revenue that year.
The proposed EU tariffs, targeting American products made in largely Republican states, including Senate Majority Leader Mitch McConnell's state of Kentucky, would hit a bourbon industry whose European exports topped $150 million in 2017.
U.S. producers exported $154 million worth of bourbon whiskey to the EU in 2017, roughly 20% of the $789 million worth of U.S. spirits exports to the EU in that year, according to the U.S. International Trade Commission.
Kentucky-based Jim Beam referred comment to the Distilled Spirits Council, a trade group representing U.S. distilled spirits producers.
"The full details of President Trump's actions on imports of steel and aluminium have not yet been announced, thus it's premature to comment on any potential retaliation by our trading partners," the group said in a statement to S&P Global Market Intelligence.
Diageo PLC, which operates several American bourbon brands, could not be reached for comment.
Harley-Davidson, based in Speaker of the House Paul Ryan's state of Wisconsin, was also a target of the proposed European tariffs. The company sold 39,773 motorcycles in Europe in 2017, up nearly 3,000 units from two years prior, according to its corporate website.
In a statement provided to S&P Global, company spokesman Michael Pflughoeft said that tariffs would lead to higher costs, adding that Harley-Davidson supports "free and fair trade."
"Import tariffs on steel and aluminum will drive up costs for all products made with these raw materials, regardless of their origin," Pflughoeft said. "Additionally, a punitive, retaliatory tariff on Harley-Davidson motorcycles in any market would have a significant impact on our sales, our dealers, their suppliers and our customers in those markets."
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Ryan's office is already pushing back against the Trump tariffs.
"We are extremely worried about the consequences of a trade war and are urging the White House to not advance with this plan," Ryan spokeswoman AshLee Strong said in a March 5 statement.
Trump, however, seemed to double down on his tariff plans, telling reporters March 5 that "we're not backing down" on them, according to White House pool reports.
Trump has even threatened to apply his own retaliatory tariff in response to Europe's retaliatory tariff.
"If the EU wants to further increase their already massive tariffs and barriers on U.S. companies doing business there, we will simply apply a tax on their cars which freely pour into the U.S.," Trump tweeted March 3. "They make it impossible for our cars (and more) to sell there. Big trade imbalance!"
Coca-Cola Co., which operates the Minute Maid orange juice brand, as well as PepsiCo Inc., which operates the Tropicana brand, two products facing potential retaliation by the EU, could not be reached for comment March 5.
Other consumer companies directly impacted by the steel and aluminum tariffs, including Campbell Soup Co. and Anheuser-Busch Inbev SA/NV have said that the tariffs will result in higher prices for consumers as well as cost U.S. brewers millions of dollars.

