Published 11:16 IST, October 3rd 2019
US tariffs on EU goods would include cheese, wine, aircraft
The Trump administration plans to impose tariffs on $7.5 billion worth of European imports - from gouda cheese to single-malt whiskey to large aircraft
The Trump administration plans to impose tariffs on $7.5 billion worth of European imports _ from gouda cheese to single-malt whiskey to large aircraft _ beginning Oct. 18 to retaliate against illegal European Union subsidies for aviation giant Airbus. The latest escalation in the administration’s tariffs will open a new chapter in the trade wars that are depressing the world economy and heightening fears of a global recession. It comes just as the Trump administration is in the midst of trying to negotiate a resolution to its high-stakes trade war with China.
Import taxes
The administration received a green light for its latest import taxes Wednesday from the World Trade Organization, which ruled that the United States could impose the tariffs as retaliation for illegal aid that the 28-country EU gave to Airbus in its competition with its American rival Boeing. The WTO announcement culminates a 15-year fight over EU subsidies for Airbus. EU aircraft will face a 10% import tax; other products on the list will be hit with 25% tariffs. The administration insists that it has the authority to increase the tariffs whenever it wants or to later the products in its list. President Donald Trump called the WTO ruling a “big win for the United States” and asserted that it happened because WTO officials “want to make sure I’m happy.” “The WTO has been much better to us since I’ve been president because they understand they can’t get away with what they’ve been getting away with for so many years, which is ripping off the United States,” Trump said at a joint White House news conference with President Sauli Niinisto of Finland.
Stock markets down
Stock markets around the world, which were already down on concerns for the world economy, added to their losses on the news. Wednesday’s award follows a WTO ruling in May 2018 that the EU had illegally helped Airbus with subsidies. It does not, however, end the long-running trans-Atlantic dispute over aircraft. WTO arbitrators are expected to rule next year about how much the EU can impose in tariffs following a separate decision that went against Boeing. The EU’s top trade official had said the bloc would prefer to reach a settlement with the United States to avoid a tariff war but that it will respond if Trump imposes new duties on EU products.
Tariffs would inflict damage on trade
Speaking after the WTO’s ruling Wednesday but before the Trump administration announced the new tariffs, EU Trade Commissioner Cecilia Malmstrom said a tariff war “would only inflict damage on businesses and citizens on both sides of the Atlantic, and harm global trade and the broader aviation industry at a sensitive time.” “If the U.S. decides to impose WTO authorized countermeasures, it will be pushing the EU into a situation where we will have no other option than to do the same,” she said. Italian Foreign Minister Luigi Di Maio, who was meeting with U.S. Secretary of State Mike Pompeo in Rome on Wednesday, vowed to “defend our businesses.” Italian wine and cheeses could face an impact from U.S. tariffs. Unlike Trump’s unilateral tariffs on billions of dollars-worth of steel, aluminum and other goods from China, the EU and elsewhere, the retaliatory tariffs authorized in the Airbus case have the stamp of approval from the WTO, an organization that he has repeatedly criticized. German Chancellor Angela Merkel acknowledged “we have lost a matter under WTO law.” “This means it’s not some sort of arbitrary question but a verdict according to international law that now weighs on Airbus, one must sadly say,” she told reporters in Berlin. “We have to see how the Americans will react now.”
Updated 12:04 IST, October 3rd 2019