NCPA - National Center for Policy Analysis

Banana War Claims U.S. Victims

March 11, 1999

Trade experts say the Clinton administration's imposition of tariffs on 15 European products -- ranging from cheese to handbags to coffeemakers -- has unwittingly damaged some U.S. manufacturers, farmers and businesses. The tariffs are being imposed in retaliation for some European countries' policies favoring imports of bananas grown in their former Caribbean colonies.

U.S. companies which own manufacturing facilities in targeted countries and industries -- from which they import their own products for sale in the U.S. -- are most affected.

  • Whirlpool Corp. has halted shipments of a coffeemaker manufactured in Portugal by a Swiss firm until the tariffs are lifted.
  • Battery-maker Exide -- which owns a German plant that manufactures certain types of batteries used as backup in some medical equipment -- is effectively barred from importing them due to the 100 percent tariffs.
  • A spokesman for Forte Cashmere -- which owns a cashmere processing plant in Mongolia and ships to mills and manufacturers in Scotland and other European countries, which, in turn, export sweaters to the U.S. -- says "we're going to feel this."
  • U.S. farmers who supply European cookie makers with ingredients for cookies which are later exported to the U.S. face a loss of their markets.

Trade experts say the increasing integration of the world's economies makes it almost impossible for the U.S. to launch a trade war without somehow shooting itself in the foot.

Source: James Cox, "Punitive Actions by U.S. Felt Worldwide," USA Today, March 11, 1999.

 

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