EU Begins $4 Billion in Sanctions Against U.S.

Pascal Lamy, the European Union's trade commissioner, last week put U.S. lawmakers on notice that they can expect $4 billion in sanctions to go into effect today due to the failure of Congress to act to get rid of overseas tax shelters for American exporters declared illegal by the World Trade Organization.

Those who will feel the pinch most acutely are American farmers and manufacturers since the Europeans will begin charging tariffs on agricultural goods, leather products, paper, steel, nuclear reactors, machinery, carpets, clothing and other goods that are directly competitive with their own products, the New York Times reported.

The U.S. received a similar warning from the EU last November over steel imports and a month later President Bush lifted the tariffs in question. This time, however, Congress won’t be able to act in time to avoid the sanctions that go into effect today. There are competing bills winding their way through Congress right now, but lawmakers told Lamy that they were unsure if either bill would be acted upon before the spring recess.

What had begun as a tax issue is now seen by both sides of the aisle as a jobs issue and neither party wants to be seen as taking action that has a negative impact on job growth in an election year, the Times reported.

"The name of this game is repeal, not retaliate and not sanction," Lamy said during an address to the European-American Business Council. He said the sanctions would be lifted the minute Congress acts to eliminate the tariffs.

A senior EU official urged the U.S. last week to take the sanctions seriously and move quickly to resolve the issue, the Times reported.

"It is a huge issue of credibility of the WTO dispute settlement system," he said.

You may like these other stories...

The Republican-led House of Representatives is expected to pass a bill this week that would permanently extend the bonus depreciation tax break. But don’t expect President Obama to sign it.The Obama administration said...
Washington D.C., our nation's capital, is the healthiest city in the country, according to a new report from USA Today. But now it's going to cost politicos on the Hill and Gen-Xers in Foggy Bottom a little extra to...
Credit Suisse says pension assets at risk unless court delays sentencingJohn Letzing of the Wall Street Journal reported on Wednesday that Credit Suisse Group AG says its management of billions of dollars in assets for...

Upcoming CPE Webinars

Jul 16
Hand off work to others with finesse and success. Kristen Rampe, CPA will share how to ensure delegated work is properly handled from start to finish in this content-rich one hour webinar.
Jul 17
This webcast will cover the preparation of the statement of cash flows and focus on accounting and disclosure policies for other important issues described below.
Jul 23
We can’t deny a great divide exists between the expectations and workplace needs of Baby Boomers and Millennials. To create thriving organizational performance, we need to shift the way in which we groom future leaders.
Jul 24
In this presentation Excel expert David Ringstrom, CPA revisits the Excel feature you should be using, but probably aren't. The Table feature offers the ability to both boost the integrity of your spreadsheets, but reduce maintenance as well.