DAIMLER, which makes Mercedes-Benz vehicles, became the first major business to warn that escalating international trade tensions are a direct threat to its profits.
From today the European Union will begin charging import duties of 25pc on a range of US goods, in response to US tariffs imposed on EU steel and aluminium early this month.
The Commission this week formally adopted a law putting in place the duties on €2.8bn worth of US goods entering the single market, ranging from steel and aluminium to sweetcorn, cranberries and peanuts, as well as whiskey, jeans and motor-bikes.
The US, which has also imposed levies on goods from China, Canada and Mexico, may up the ante with another round of tariffs. If so, Irish whiskey exports could potentially be affected because US-made bourbon has been hit here.
The US is by far the biggest market for Irish whiskey, accounting for 4.1 million of the nine million cases sold last year, according to figures from the Irish Whiskey Association.
The head of the Irish Whiskey Association, William Lavelle, warned that with the US the biggest, and Russia the fastest growing, Irish whiskey market, the sector will suffer if free trade is curtailed.
“The Irish whiskey industry has been a major beneficiary of global free trade and EU-led free trade agreements. For example, the CETA trade deal with Canada is helping spur double digit export growth in that market. We continue to call on the EU Commission to seek to de-escalate tensions with the US and Russia to avoid us slipping into a devastating trade war,” Mr Lavelle said.
“Growing global trade threats also present a challenge to our industry to pursue more growth in more markets. Like all sectors, we must diversify.”
Yesterday, Daimler said its sales could be hit because US-made Mercedes-Benz SUVs would be hit with tariffs on cars exported from there to China.
In Europe, officials have called on the US to reverse its original imposition of tariffs. “We do not want to be in this position,” EU Trade Commissioner Cecilia Malmstrom said in a statement, adding that the “unilateral and unjustified” US decision had left the EU with no choice.
She called the EU response proportionate and in line with World Trade Organization rules and said that they would be removed if Washington removed its metal tariffs. EU steel and aluminium exports now facing US tariffs are worth a total of €6.4bn.
Donald Trump hit the EU, Canada and Mexico with tariffs of 25pc on steel and 10pc on aluminium at the start of June, ending exemptions that had been in place since March.
Daimer shocked investors yesterday with its warning that global trade tensions would hit sales.
It cut its 2018 profit forecast and German rival BMW said it was considering “possible strategic options” in light of the rising trade tensions between China and the United States.
The revised forecast sparked fears of earnings downgrades across the industry and followed a proposal by US President Donald Trump to impose tariffs on imported vehicles
Daimler’s warning came a day after top central banks said the developing trade war was weighing on business confidence.