International Trade and Global Business


US Trade Wars Move to the EU with up to 25% Tariffs Hitting Popular EU Products

The US just got the green light from the WTO to impose new, punitive tariffs on the EU in retaliation for the EU’s subsidies of aircraft maker, Airbus. The US contends that EU subsidies have given an unfair advantage to Airbus versus its US rival, Boeing. Though the EU has made much the same claim against the US for its subsidies of Boeing, and the WTO agreed, the amount of tariffs the EU may impose on the US as a result in that separate WTO case will not be decided until 2020.
The dispute has been ongoing for 15 years but under the Trump Administration, the US has become stricter in its trade policies, as evidenced by its demands to renegotiate long-standing trade agreements with countries such as Canada, Mexico, and South Korea, and its escalating trade war with China.
According to U.S. Trade Representative Robert Lighthizer, the US “expect[s] to enter into negotiations with the European Union aimed at resolving this issue,” but in the meantime, tariffs of 10% on planes and other aircraft, and 25% on other products, are expected to be imposed, effective October 18, 2019.
If the anticipated negotiations are unsuccessful, the US has latitude to impose further tariffs.
Affected EU products include popular exports such as Irish and Scotch whiskey, French cheeses, Spanish olives and olive oils, as well as a host of other agricultural and food products, tools, raw materials, and clothing. A full list of the affected products may be viewed here.
CNBC reports that US imports of EU products amounted to $488 billion in 2018, and it exported about $319 billion worth in that same period to EU countries.


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