With the U.S. set to double the tariffs on selected European imports, Roscoe B. Starek III, the Direct Marketing Association’s senior vice president for catalog issues, yesterday predicted that it will lead to sharp price increases by their domestic competitors.
Monday, the World Trade Organization formally approved the Clinton Administration’s plan to double the tariffs on a drastically reduced list of selected European imports. The move was made in apparent retaliation over the European Union’s import policy on bananas that favors British and French owned companies over their U.S. counterparts. The move reinforces the U.S. position that the EU’s policy is illegal and in violation of the international General Agreement of Tariffs and Trade (GATT) which its members and the U.S. previously signed.
The administration said earlier in the year that it would begin doubling the tariffs on March 3 on a list of 81 products worth some $500 million. That list was later reduced to bath preparations, handbags, pocket items of laminated plastics, certain papers, bed linens, lithographs, lead-acid storage batteries, and electrothermic coffee or tea makers for a total value of $191.4 million.
Since March direct marketers and other importers of European goods have been posting bonds with the government and assuming liability for paying the higher import tax at a later date.
According to Starek “catalogers who include those products in their books will obviously be forced to raise their prices for those items and, as I see it, their domestic competitors will also be forced to raise their prices.” He also suggested that the wholesale prices of domestically produced items competing with European products would of necessity increase as catalogers and retailers seek replacements that are less expensive.
