According to a report in UK *'s The Herald, tariffs on a range of american products including skateboards imported in to the EU have just increased 5%.

Reportedly, Pascal Lamy, the EU trade commissioner will continue to raise the tariff by 1% per month until a current American/European trade dispute is settled. Imports impacted by the tariff raise include a wide range of products including skateboards, jewelry, steel products, honey, shoes, and nuclear power stations. The article did not state the current tariff rate on US skateboards imported into the EU.

Apparently, the last time Europe * and the US had such a stand-off, which occurred in Fall 2003 * over a tariff Bush imposed on steel imported to the US, the white house gave in rather than face increased tariffs in response.

Increased tariffs effect consumers, retailers, wholesalers, and producers alike: the resulting higher prices usually result in decreased sales, and make the imported products in question less competitive in the marketplace.

Apparently the current dispute centers around "established tax breaks worth some $5B a year granted by the federal government to US exporters" including Boeing, Microsoft *, and smaller US companies. Reports indicate that these grants were ruled illegal by the World Trade Organization (WTO) in 1999 *, and though the US lost an appeal on the issue in 2002 *, the subsidy system found illegal is still in operation. Reportedly the WTO ruled that tariffs worth up to $4bn a year could be imposed if the US did not comply. But even if Commissioner Lamy's tariff meter keeps adding 1% per month right through to the end of this year, supposedly the total penalty US exporters face is just $315M, and in 2005 *, that burden would rise to $666M –still far short of what the WTO sanctioned.

The solution to this current Euro-American trade conflict is far from trivial. At its core it concerns powerful multinational big-business interests, and thus could be seen as carrying significant momentum to maintain the status quo from US political interests.

It's interesting to note that ignoring WTO rulings seems endemic in the Euro-American equation: the article goes on to mention that since 1999, Europe has been paying penalties totalling some $116M a year for refusing, despite a WTO ruling, to allow imports of American beef from cattle treated with growth hormone.

"The name of the game is not retaliation, but compliance," claims Lamy, attempting to dispel thoughts that he is trying to start a new transatlantic trade conflict.

This article is based on an article entitled "The meter’s running on your skateboard, Uncle Sam", by Alf Young published in the 3/2/04 edition of UK's The Herald, and originally found at http://www.theherald.co.uk/11018.shtml

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