News Analysis: U.S. tariffs' impact on Dutch exports limited but consumer demand likely to decrease

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by Maria Vasileiou

THE HAGUE, Oct. 7 (Xinhua) -- The United States plans to impose import tariffs on a wide range of European Union (EU) goods will have "limited" impact on Dutch food exports, experts say, but warn that demand for European products by American consumers is likely to decrease.

"The impact of higher U.S. import tariffs to Dutch exports is limited," said Nadia Menkveld, senior economist at Dutch bank ABN AMRO. "The U.S. list includes around 160 products that are subject to higher import rates. Many of these products such as wine and olives are hardly produced, if at all, in or exported from the Netherlands."

Menkveld singled out cheese and pork as the Dutch products mainly to be affected by the new tariffs which the U.S. is threatening to impose on EU goods. But the impact is small, she argued.

"In 2018, the Netherlands exported 3.4 billion euros worth of cheese and 1.7 billion euros worth of pork worldwide. Only a small part of it goes to the U.S.," she said.

Dutch food is mainly exported to other EU countries, such as Germany, Belgium and France and only two percent of total Dutch food exports go annually to the American market, amounting to 1.1 billion euros in total.

According to the Dutch Ministry of Foreign Trade and Development Cooperation, approximately half of Dutch cheese exports to the United States worth around 39 million euros will be affected by the new 25-percent tariff set to apply on Oct. 18.

The U.S. announced import duties on a long list of European products last week, responding to a World Trade Organization (WTO) decision allowing the U.S. to impose 7.5 billion U.S. dollars in taxes on European products to compensate for the loss American aircraft company Boeing has suffered through illegal EU subsidies to competitor Airbus.

The list includes charges of 25 percent on, among other things, Scottish and Irish whiskeys, French wine, olives, butter, yogurt and cheese from across the EU, and a 10-percent duty on European aircraft.

Dutch cheese producers were relieved to see that "Gouda" and "Edam" cheese, by far the most important types that the Netherlands exports to the U.S., don't fall under the new tariffs. These types of cheese are mentioned on the U.S. government list, but apply to Germany, Spain and Britain.

As to pork export to the U.S., again the impact is limited. The Netherlands exports a lot of meat to the U.S., such as spare ribs and sausages, according to COV, the association for the Dutch meat industry.

The association estimates that just 1 percent of total Dutch pork exports, amounting to 200 million euros to the U.S., is affected by Washington's new tariff plans.

Dutch entrepreneurs are concerned that demand for European products by U.S. consumers might decrease as the new tariff charges will pass on to consumer prices.

"It is important to see how consumers and importers in the U.S. will react," said Onno Boersma, general manager of GemZu, an umbrella organization of Dutch Dairy Trade. "For some it will mean much higher prices leading to lower demand."

"If a higher price leads to less demand from the U.S., this can have consequences for Dutch entrepreneurs," said Menkveld.

Another source of concern is whether the U.S. list of products subject to 25 percent tariff will change. The United States can add and remove products from the list.

An earlier draft list announced by the U.S. government in July 2019 included also other Dutch products, such as cookies, salmon, coffee, waffles and non-alcoholic drinks. These are not included in the most recently announced list.

"Dutch entrepreneurs export more than just cheese and pork to the U.S.," said Menkveld. "However, the most important Dutch export products, beer and cocoa, are not yet affected by higher import rates." Enditem

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