European Union to impose retaliatory trade sanctions March 1 if Congress fails to act
The European Union (EU) will impose trade sanctions on billions of dollars of U.S. goods starting March 1 if Congress fails to repeal an export subsidy ruled illegal by the World Trade Organization (WTO). The export subsidy provision — known as the “extraterritorial income” deduction — gives U.S. companies a big leg up on competitors, but is paid for by the U.S. taxpayer, said William J. Streeter, a professor of international business at the Olin School of Business at Washington University in St. Louis. Streeter says legislation to repeal the export subsidy that has yet to be passed by Congress is projected to save U.S. taxpayers $80 billion over the next decade, but will be offset by lower corporate taxes on the earnings of U.S. firms abroad.