"That was a very aggressive stand from Serbia," Prime Minister Ramush Haradinaj told a news conference. The tariffs come into force immediately. They don't apply to international brands produced in the two neighboring countries.
Haradinaj said that Serbia and Bosnia had never respected the Central European Free Trade Agreement, or CEFTA, rules in trade relations with Kosovo, causing significant financial losses. Earlier this month, Kosovo introduced a 10-percent tax on goods from Serbia and Bosnia, neither of which have recognized Kosovo's 2008 independence.
Serbian President Aleksandar Vucic called a meeting of the national security council, Serbia's top security body, to address the issue. He said after the meeting that Kosovo's move amounted to a de-facto trade ban, but that Serbia won't retaliate.
"The consequences could be catastrophic and destructive for relations in the entire region," said Vucic, urging international pressure on Kosovo to revoke the decision. "This has to stop, there is no other option."
Despite simmering tensions between Serbia and Kosovo, business ties have grown and Serb imports to Kosovo amount to about 400 million euros ($460 million) a year, while Kosovo's exports to Serbia are much lower.
Serbian Trade Minister Rasim Ljajic said Kosovo's move was as a result of its failure to get an Interpol seat. Bosnian Foreign Minister Igor Crnadak likewise called the tariff "payback" for the Interpol decision.
EU foreign policy chief Federica Mogherini called on Kosovo to revoke the decision, saying it "is a clear violation of the Central European Free Trade Agreement and of the spirit of the Stabilization and Association Agreement between the European Union and Kosovo."
Zahir Tanin, head of the U.N. Mission in Kosovo, also expressed his "concern regarding the potential impact on the people of Kosovo as well as the political implications on the dialogue and normalization of relations between Belgrade and Pristina."
Kosovo and Serbia have been in European Union-mediated negotiations for seven years. The EU has told the two sides they must normalize relations as a precondition to entering the bloc. Vucic has said that Serbia won't take part in talks until Kosovo lifts its recently introduced taxes.
"It is 20 years since the war, 10 years from independence, and Serbia has not shown the good will to normalize ties," Haradinaj said.
Dusan Stojanovic contributed from Belgrade, Serbia, and Amer Cohadzic from Sarajevo, Bosnia-Herzegovina.