BRUSSELS, Jan 21 (Reuters) - U.S. customs authorities
will face a real challenge if President Donald Trump goes
through with his threat to place tariffs on six EU countries -
rather than the whole European Union - given the ease of
movement of goods between EU members.
Trump has vowed to place increasing tariffs on goods from EU
members Denmark, Finland, France, Germany, the Netherlands and
Sweden, as well as non-EU states Norway and Britain, until the
United States was allowed to buy Greenland.
TECHNICALLY POSSIBLE, BUREAUCRATICALLY COMPLEX
Under EU rules, goods manufactured in the bloc are only
marked as being of EU origin, but a third country can require
information is provided by individual EU members.
It can be difficult to determine that a good is made in a
single EU member, however, because of extensive cross-border
supply chains and the ability to transport goods from one EU
member to another without customs controls. Establishing the
origin of goods would be a complex task for U.S. customs
authorities.
Niclas Poitiers, research fellow at Bruegel, said it would
probably not be difficult for smaller companies to obscure the
production location of their products, while larger firms with
more transparent supply chains might decide to shift production
to EU countries not targeted by the measures.
CAN U.S. TARGET BRANDS?
Brand names are generally associated with specific
countries, but production can take place elsewhere.
Carmaker Volkswagen, for example, manufactures cars in
Germany, but also in Slovakia, while Sweden's Volvo Cars has a
factory in Ghent, Belgium with a similar capacity to the plant
at its Gothenburg headquarters, which makes Volvo's top-selling
XC60.
Volvo has shifted output following tariffs. It will start
making the XC60 in the U.S. at the end of the year and has
increased production of electric vehicles in Belgium after the
EU placed tariffs on China-built EVs, but the timeframe for such
switches has typically been at least a year.
WHAT ABOUT FRENCH WINES AND CHEESES?
Well-known EU foods and drinks, such as French champagne or
Camembert, may be more easily targeted because they are marketed
and sold in ways that highlight their heritage and origins.
Reinforcing this, the European Union has a system of
"geographical indications", or GIs, granting intellectual
property rights to some 4,000 products linked to particular
areas of production, from Italy's Parma ham to Spain's Manchego
cheese and Greece's Kalamata olives. As a result, the term
"champagne", for example, can only be used for a sparkling wine
made in the Champagne region in the northeast of France or
"feta" for a specific cheese from Greece.
The United States has repeatedly denounced the system as
protectionist, particularly when it is included in the EU's
trade agreements to ensure foreign partners also agree to
respect the protected status of a range of products.
Of the six targeted countries, France has the most GIs.