No more trade war: USA and EU sign a 5-year truce

No more trade war: USA and EU sign a 5-year truce

Italian and European leather goods’ manufacturers will find less obstacles when exporting to the United States. USA and EU has said no more trade war and signed a 5-year truce to a disagreement (that had been continuing for 17 years) on public money given to Boeing and Airbus. The new agreement, which is lengthening the suspension of duties imposed on March 2021, will become official on July 11th. This means that 11.5 billion USD worth of duties will not be applied. “A breakthrough”, as stated by EU president Ursula von der Leyen. The agreement reached during the last G7 meet (in photo), could pave the way to a deal on digital tax as well. And thus, it would resolve the concerning threat of potential 25%-duties on handbags and footwear from Italy”.

No more trade war

Beside from wine, cheese and oil, Europe will finally be able to sell handbags to the largest non-EU marketplace, with less barriers. “Instead of fighting with one of our closet ally, we are finally joining forced against a common threat – commented Katherine Tai, commerce representative for the United States, to The Guardian -. The common threat is clearly China”. In this same spirit, the position of Italy’s PM Mario Draghi is a sign. The Italian government will review its adherence to the Belt and Road Initiative, commercial and infrastructure plan that was signed by the previous government with Beijing in 2019.

The product categories involved

Among the categories of products included in duties, points out Modaes, there are 22 voices of “code 42” of the NC2018 (TAR NC). These are leather products, from saddlery to wallets. “These already are among the most taxed items on the planet, and thus have a low capacity to absorb additional tariffs, mostly due to the current high logistic costs – commented Steve Lamar, president of AAFA (American Apparel & Footwear Association) with World Footwear -. It’s now the time to re-found a lasting partnership between the sides”.

Open points

USA and EU still have some commercial controversies in place. The most important is the one tied to the digital tax in Europe. The US claim they will retaliate. How? By applying a 25% duty to a number of goods imported by the USA. Among those are handbags and shoes from Italy. It’s clear that this last reached agreement is a good sign that could open the door to more favorable developments.

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