European Union levies tariffs on several US exports
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Manufacturing News, Source : TheManufacturer.com
Published : 01 Mar 2004 21:12
The European Union began levying World Trade Organization-approved penalty tariffs on several US exports today, in an effort to force the US Congress to repeal certain tax breaks for US exporters.
The US Congress is currently struggling to restructure current $5 billion "foreign sales corporation" tax breaks for US exporters that the WTO declared illegal four years ago under WTO rules. The WTO gave permission last year to the European Union to levy sanctions on the United States if the tax breaks had not been eliminated.
The sanctions will take the form of an initial five-percent penalty tariffs, starting today, on a number of US exports, including jewelry, certain types of iron and steel, textiles and several other products. The products were selected to ratchet up pressure on lawmakers, who are expected to hear from constituent companies harmed by the tariffs. The tariffs will rise by one percentage point every month for the next year, until the tax breaks are repealed.
Several bills are currently under consideration in Congress to reorganize the $5 billion into tax breaks for manufacturers, including a bill coauthored by the chairman of the House Small Business Committee, US Representative Don Manzullo (R-IL), which would give the tax breaks to companies who keep their manufacturing operations in the United States.
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