The Trump administration wasted no time announcing the imminent imposition of new tariffs on European goods after getting the green light from the WTO on Wednesday following a favorable ruling in the long-running dispute over Airbus subsidies.
The body – which Donald Trump has frequently criticized for being “unfair” to the US – cleared the way for duties on $7.5 billion in product from Europe annually.
“For years, Europe has been providing massive subsidies to Airbus that have seriously injured the US aerospace industry and our workers”, Bob Lighthizer said in a celebratory statement. “Finally, after 15 years of litigation, the WTO has confirmed that the United States is entitled to impose countermeasures in response to the EU’s illegal subsidies”.
And so, starting on October 18, everything from French wine to cheese to Irish and Scotch whisky will get more expensive for US consumers.
Beginning in just over two weeks, the US will impose 25% levies on those items, as well as a host of other goods including olives, pork, butter and yogurt. The full list is embedded below. Civilian aircraft will be hit with 10% tariffs.
“The United States will begin applying WTO-approved tariffs on certain EU goods beginning October 18 [and] we expect to enter into negotiations with the European Union aimed at resolving this issue in a way that will benefit American workers”, Lighthizer went on to say.
Earlier, Bruno Le Maire warned that the EU will respond “firmly” if the US goes ahead with tariffs. “If the US chooses to impose sanctions, it would be an economic and political error”, the French Finance Minister added.
European Trade Commissioner Cecilia Malmstrom said that although Brussels does plan to hit back once a parallel dispute on Boeing subsidies is adjudicated early next year, that’s not the route Europe wants to go.
“The mutual imposition of countermeasures, however, 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”, Malmstrom lamented.
Needless to say, this isn’t going to do anything to deescalate simmering transatlantic tensions at a time with the EU economy is teetering on the brink of recession and the US suddenly looks to be not far behind on the road to a downturn.
Airbus CEO Guillaume Faury advised Trump to consider the consequences of going forward with the new levies, which would ‘have a negative impact on not only US airlines but also US jobs, suppliers and air travelers”.
If you’re wondering what, exactly, Faury means by that, Bloomberg is happy to elaborate. “Two-fifths of the components that make up an average Airbus jet come from the US [and] that helps support 275,000 jobs in 40 states through spending that totaled $50 billion in the past three years”, a Wednesday afternoon article reads.
“Europe is facing tariffs today because Airbus has refused for years to comply with WTO rulings,” Boeing said in an e-mailed statement. “Unfortunately, Airbus’s non-compliance will negatively impact European Member States, industries, and businesses completely unrelated to Airbus’s actions, as well as Airbus’s airline customers”.
Is there any good news in all of this?
Well, yes, actually. The good news, as Bloomberg details in a separate article, is that “the US removed leather goods from its original proposed list sparing luxury labels such as Givenchy and Louis Vuitton”.