Batteries among UK products hit by new trade war tariffs

BRITISH MANUFACTURERS of batteries and bath products will be hit by punitive tariffs in the long-running banana trade war between the United States and Europe, it was confirmed yesterday.

Makers of French handbags and German tea and coffee-makers will also suffer following the World Trade Organisation's (WTO) decision to approve US trade sanctions worth $191.4m (pounds 119.6m).

In Brussels, EU officials said there were no plans to challenge the WTO ruling, although they strongly disputed the US assertion that sanctions could be backdated to the beginning of March. The US is maintaining that the tariffs should apply from 3 March, the date it decided to impose sanctions on European companies as compensation for losses suffered by US companies as a result of the EU banana trading regime.

The EU, however, believes that sanctions can only apply from the beginning of this week, the date of WTO ratification of US proposals. The EU is now expected to seek both clarification on the ruling from the WTO as well as talks with officials from the US.

"It is normal that a decision only applies from the day it was taken," said Roderick Abbott, EU trade ambassador.

Although many British industries - including exporters of cashmere sweaters and biscuits - have been spared sanctions after the WTO decided that the US's original proposals were excessive, yesterday's ruling still targets a host of smaller exporters throughout the UK.

Companies affected in Britain include makers of bath preparations, whose exports to the US are worth more than pounds 7m a year, and manufacturers of batteries and lithographs. UK companies export almost pounds 15m worth of batteries to the US every year, while annual exports of lithographs total pounds 2m.

A spokeswoman for the Department of Trade and Industry said: "We have made the US very aware of the harm they have been causing to the sectors targeted."

The sanctions - imposed after the US successfully argued that EU banana import rules favoured former European colonies over Latin American producers and US marketing companies - could last until next year. According to European Commission sources, the EU will need "several months" to amend its current banana import regime.