US-Europe dispute threatens main artery of world trade

tre wars threatening to push global ecomy into a recession are entering a new phase, with United States and European Union escalating a dispute that endangers world’s biggest tre relationship. 
After Trump ministration slapped steep tariffs on $7.5 billion in EU goods, mainly tritional produce like cheese and wine, Europeans me clear y would retaliate in kind. Some fear tariffs could ultimately le to U.S. import duties on European cars, a big ecomic blow that Trump has been threatening to deliver for months.

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Exchange echoes how U.S. and China ratcheted up a tariffs fight 

exchange echoes how U.S. and China ratcheted up a tariffs fight in recent months that has bruised businesses around globe and stunted ecomic growth.
“This step triggers fears of a new round of escalation of tariff wars,” said Alex Kuptsikevich, a financial analyst with broker FxPro. “ introduction of tariffs and fears of tit-for-tat steps could furr suppress business sentiment, which is alrey at lowest levels for years.”
Trump ministration’s latest tariffs target large aircraft but also many typical European products such as olives, whiskey, wine, cheese and yogurt. y take effect Oct. 18 and amount to a 10% tax on EU aircraft and a steep 25% rate on everything else.

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U.S. gets legal go-ahe from WTO

U.S. got legal go-ahe Wednesday from World Tre Organization in a case involving illegal EU subsidies for plane maker Airbus, which predates Trump ministration.
But EU is expecting a similar case involving U.S. subsidies for Boeing to go in its favor, with a ruling due in coming months. It has said it hopes two sides can hold off new tariffs, which amount to taxes on domestic importers. Sometimes importers pass on higher costs to consumers, making goods more expensive.
“If U.S. imposes countermeasures it will be pushing EU into a situation where we will have to do same,” said European Commission spokesman Daniel Rosario, echoing dark outlook expressed by many EU governments.
“This is a move that will first and foremost hit U.S. consumers and companies and will make efforts towards a negotiated settlement more complicated,” he said.
A group of American alcohol importers, wholesalers and distributors released an open letter this week urging an end to tariffs. y say tariffs on Scotch whiskey, liqueurs and wine would affect nearly $3.4 billion in imports and cost 13,000 U.S. jobs, including truckers and bartenders.

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Tariffs d to uncertainty for global ecomy

tariffs come on top of existing ones that U.S. and EU exchanged last year and multiply heaches for European businesses fretting over Brexit, which could see Britain leave EU on Oct. 31 without a deal  meaning new tariffs overnight on heavy flow of tre across Channel.
More broly, tariffs d to uncertainty for global ecomy, which has been hit particularly hard by wide-ranging U.S. dispute with China over tre and techlogy.
U.S. and European ecomies are more closely integrated than U.S. and China, with companies heavily invested across borders, so potential dam from an escalation could dwarf dispute with China.
Total U.S. investment in EU, for example, is three times higher than in all of Asia. And EU investment in U.S. is eight times that invested in China and India combined. two sides account for about half of world ecomy.
“If it weren’t for wider tre war, everybody would kind of shake this off and say it’s just business as usual under WTO rules,’’ said Edward Alden, senior fellow at Council on Foreign Relations. “In current context, it’s going to be hard to contain. Europeans feel like ir ecomies are under assault by Trump ministration.’’

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EU is t allowed to retaliate against U.S. sanctions approved by WTO

EU is t allowed to retaliate against U.S. sanctions approved by WTO. But 28-country tre bloc has shown a willingness to stretch rules when it comes to responding to Trump’s aggressive tre policies, Alden said.
For example, Trump last year imposed tariffs on steel and aluminum from EU and or countries, claiming y were a threat to U.S. national security. WTO gives countries wide leeway to decide ir own national security interests, so Trump’s move appeared to pass muster with Geneva-based tre monitor. But EU lashed back with retaliatory tariffs on U.S. product anyway.

Rising uncertainty over one of oldest and biggest ecomic tre paths would furr darken outlook for importers, exporters and manufacturers on both sides of Atlantic.
Bob Bauer, president of New Jersey-based Association of Food Industries, which represents around 1,000 food importers and exporters worldwide, said his members are angry that food is being targeted in a dispute over aircraft subsidies.
“We’re going to be paying so that Boeing and Airbus can continue to receive se subsidies,” Bauer said, ding that many food importers are small, family-owned businesses that can’t absorb a 25% tariff because food has low profit margins to begin with.
he of Spanish Federation of Food and Bever Industries, Mauricio García de Quevedo, said new U.S. tariffs will make it harder for companies he represents to compete internationally. And that will contribute to job losses, he said.
United States is Spanish sector’s second-biggest food and bever client after EU, according to federation. sector exported $1.9 billion (1.7 billion euros) last year.
Miguel Blanco, secretary-general of Spain’s farming-sector umbrella group COAG, representing more than 15,000 Spanish farmers and livestock breeders, said tariffs are “completely unfair and overblown.”
“Once again, farming sector is going to pay for an EU tre war which has thing to do with Spanish countryside,” Blanco said, according to Europa Press.
Federation of French Wines and Spirits Exporters also deplored U.S. decision.
“We don’t feel at all initially involved in this litigation so we feel we are a bit hosts of se retaliatory measures,” said federation president Antoine Leccia.
In Germany, which has Europe’s largest ecomy and focuses heavily on exports, Federation of German Industries said U.S. was using WTO ruling to intensify tre disputes.
U.S. President Donald Trump has threatened to impose tariffs on European cars, a huge sector in Germany, and some fear this week’s escalation could le to that.
“re is a risk that many industries on both sides of Atlantic will find mselves in a lose-lose situation,” federation chief Joachim Lang said.