In an alleged “major victory” for Trump, the US Trade Representative announced U.S. Wins $7.5 Billion Award in Airbus Subsidies Case.
Bear in mind, Airbus is expected to win a larger WTO suit against Boeing next year.
It would seem that the best course of action would be for Boeing and Airbus to stop illegal subsidies, but that’s not how Trump’s mind works.
Trump Strikes Back
In retaliation for Airbus subsidies, Trump will strike back at the EU with tariffs on cheese and whisky makers.
This started a chain reaction in which U.S. Importers Stockpile Parmigiano and Provolone.
Ambriola Co Inc’s mammoth warehouse in West Caldwell, New Jersey, is crammed full of boxes and wheels of harder cheeses such as Parmigiano Reggiano, Pecorino Romano and Grana Padano – and more is coming, lots more.
Phil president and chief executive officer of Ambriola, a unit of Auricchio SpA, one of Italy’s largest cheese producers, is among the many importers and shop owners across the country who are scrambling to stockpile European cheeses before new U.S. tariffs kick in on Oct. 18 in efforts to shield consumers from price hikes.
The Trump administration on Wednesday slapped 25% tariffs on cheese and other European Union products ranging from whisky to woolens, in retaliation for EU subsidies on large aircraft. Both sides say they are open to negotiations, but trade experts see little chance of averting the duties – at least in the short run.
Some higher-priced items will simply disappear from stores, he predicted, like Moliterno al Tartufo, an aged Italian cheese with an intense truffle flavor. Even Parmigiano Reggiano could be at risk if prices rose to $30 a pound, he said.
Scotch Too
For now, EU Pledges Restraint as U.S. Moves to Add Tariffs
President Trump, who has repeatedly claimed the EU has taken advantage of the U.S., is also poised to decide by Nov. 13 on whether to impose duties on imports of European cars and auto parts. “A nice victory!” Mr. Trump tweeted on Thursday, hailing the WTO award in the long-running aircraft fight.
Washington strategically crafted its list to hit exporters across the EU, and particularly in the four countries that make up the Airbus consortium—Britain, France, Germany and Spain.
Of the U.K. products targeted by the U.S., single-malt Scotch whisky makes up more than half of the total value—more than $460 million, according to the Scotch Whisky Association, a trade organization. “The U.S. is our largest and most valuable single market,” SWA Chief Executive Karen Betts said, citing some $1.25 billion in annual exports. “It will undoubtedly damage the Scotch whisky sector.”
Despite the EU’s current restraint, the threat of escalation persists. European officials warned the EU would hit back if U.S. duties are still in place when the bloc receives its WTO award in the Boeing case.
Case Started in 2004
The Boeing-Airbus dispute started in 2004.
Here are the Highlights of the 15-year Airbus, Boeing Trade War.
The US won the case against Airbus, but in March of 2019, the WTO said the “U.S. has again failed to halt subsidized tax breaks to Boeing in Washington state.”
The EU’s claim against Boeing is $20 billion. A final ruling isn’t in, but most of the reports I have seen suggest something north of $11 billion.
Victory at Last
It is on this expected negative differential that Trump has proclaimed “victory”.
No Winners
The WSJ sums things up nicely Boeing-Airbus Is a Trade Dispute Without Winners.
Instead of going after airliners, Trump targeted cheese and scotch.
Why?
Airbus employs 3,000 highly skilled workers [in the US]. The most important site is in Mobile, Ala., which builds the best-selling A320 model and the state-of-the-art A220—which Airbus bought from Canadian manufacturer Bombardier in 2017. All of these jets need imported parts from Europe.
Bring on the Parmigiano!
Meanwhile, please note Trump Winning So Much It Almost Seems Unfair.
Mike “Mish” Shedlock
Why, I wonder, add tariffs on Scotch whisky? There are no major airbus bits manufactured in Scotland, probably just the toilet roll holders for the A320.
But of course ……… he’s still mad at the Scottish government for not letting him trample all over the planning regulations at Turnbury golf course, building over 500 “luxury” properties. They also had the temerity to allow an offshore wind farm that would district the big hitters at the eleventh tee. Having lost £33M over 4 years since he bought the course he needs a way to look like a successful investor.
Who says Trump can’t make sensible, well thought out decisions?
EU makes Scotch? I thought that comes from Scotland…..part of England and part of brixit?
If the UK leaves the EU , the tariff will have no effect on Scotch ? It would make Irish and French liquors more expensive , a Socialist helping hand for Americans.
WOW, such a hassle to get to this point to make a comment.
Anyways, I would think that the high prices the U.S. would charge imports in what is known as tariffs, would work in the Repubs/donald’s favor…”BUY AMERICAN”. However, I do admit that as an independent, I prefer provolone and Canadian Club Whisky.
I can’t believe Mish is so worked up about cheese and whiskey. And he wonders why many people think he has Trump Derangement Syndrome.
When you can’t make it a week without finding something to complain about, so you start whining about imported cheese… you’ve got TDS
Is velveeta even cheese?
What is it?
I also don’t think Wisconsin cheese is any good
Typically eat imported Cheddar and Gouda
Feed Mozzarella to our dog, but I do like that on Italian dishes and Pizza
I make a great fondue with Parmesan, Gouda, and one other cheese that varies depending on what I have
I enjoy Cabot Cloth Bound Cheddar. Vermont.
I don’t have a problem with Wisconsin cheese, but I’m not a cheese snob.
Given a choice, Vermont and upstate NY both have better cheese than Wisconsin…. but Wisconsin is still better than most European garbage.
You can only get so worked up about bacteria growing on dairy.
Lots of food tastes great without cheese.
Jim Bean is much better than scotch whiskey.
The only adult beverage from Europe that will be missed is Guinness. But the Guinness in the states isn’t made in Europe (its made in Boston, and has lower alcohol content).
German beir isn’t sold in the USA — Uncle Sam doesn’t believe his subjects can handle the alcohol content, and they aren’t smart enough to know the difference.
Bring on the fondue.
just verifying that this is fake/myth right? 600 Years of Grape Harvests Document 20th Century Climate Change
A 664-year record of grape harvest dates from Burgundy, France, reveals significantly warmer temperatures since 1988 link to eos.org
Stop confusing the deniers with reality – they only believe the voices they like to hear, mostly inside their own heads.
Just like a religion, climate denial is about belief, not science. When you dig down you get to a point where deniers have to believe that millions of academics, for over 150 years, all across the planet, and in many diverse disciplines, are all in on a big secret plot to target right wing American tax payers in 2019.
Remember the lecture we got on Occam’s razor a few days ago 😉 ?
You left out the money scam … they’re all doing it for lush government funding, while their opposites have to make do with money from the poor oil multinationals and begging-bowl think tank types.
Let’s not forget that climate science is a sort of multi-disciplinary intellectual exercise, and Americans have that propensity for intellectualism.
Has anybody told him the Scotland doesn’t build Airbuses? Mobile, Alabama is an Airbus manufacturing base however. How about tariffs on the stuff they try to call Whisky from there.
Taxing whisky is going too far – the ruling elite will be buying pitchforks for their staff at this rate!
On the important Spanish olive oil front (also tariffed)
….Data from the International Olive Council shows that Italy produces 300,000 tons of olive oil per year on average. During the same time span, though, it retails a whopping 500,000 tons for domestic sales, with another 330,000 marketed for international consumption. A 2017 investigation from Italy’s state-run RAI television uncovered that about half of the “100% Italian” olive oil bottles sold within the country contains product from other countries. Based on those numbers, Italy would need to draw about 580,000 tons of olive oil from outside sources every year.
A significant chunk of that is coming from Spain, as the Customs of Spain reports that it exported over 355,000 tons of its olive oil to Italy last year. As the world’s largest olive oil producer, Spain easily has the capability to produce that much oil….
Kind of like the rapidly relocated Chinese factories…who knew olive oil was so slippery?
Do you mean to tell us that there is a smidgen of illegality in Italy?
maybe it means that even without the EU, european continent countries could do business with each other…..more easily so, even !
And the photo of Parmesan at the top of this story is an imitation of Parmigiano reggiano.
It is almost impossible to disentangle the embedded and hidden subsidies provided by tax facilities, regional services sweeteners, government and military orders, regulatory relief or obstacles as well as generalized subsidy and incentive measures from real prices, especially with behemoth airplane companies. The USA will never admit that there is bias in government tenders for Boeing products, or that military pork spending cross subsidizes the airplane sector, or anything else. The EU will continue with better hidden subterfuges.
This dispute, like agriculture subsidies, has proven to be a perennial.
I just hit the car in front of me. I only broke the radiator and some damage to the grill, headlights, etc. The other guy’s gas tank was leaking, trunk and back bumper completely distorted, basically totalled. I just won big. The other guy was really upset, especially because I was kind of smirking as I compared the damages.
Winning Big Time.
These imports will really hit the EU dairy sector hard. The price of butter has doubled the past two years, as has the price of skim milk and milk powder products, mostly due to heavy selling of milk powder (etc) into the Chinese market. It means US consumers will pay more and EU consumers may get some price relief.
I pay considerably less for milk, cheese, and butter in the EU than I do in the US. In fact, the US has gotten considerably more expensive relative to the EU over the past couple of decades. And now the full-load of taxes in the US is approaching that of Europe. There’s a much bigger story going untold here.
These tariffs are stupid but mostly meaningless except for some importers who may be put out of business.
The car tariffs Trump threatens would not be meaningless
If Whisky imports are meaningless to you Mish, you really need to rethink your life 😉
I was thinking the same thing. I am a Scotch drinker and WA state adds enough tax on it without the Feds screwing us over anymore than normal.
I’m not a big believer in tariffs, but Trump should impose tariffs equal to those imposed by the EU. I have no idea how that would affect other car producing nations however.
If we keep winning like this, we’re going to be standing in Victory Lines to get into stores with mostly empty shelves! MAGA!
Really so these tariffs are going to lead to some democratic fantasy of a Trump induced dystopia? That weird because I can source local spirts and cheese with zero effort.
Dude, I’ve tried U.S. “whisky” – unless they are hiding the good stuff somewhere, we’re in a world of tariff pain 😉
Evidently the pompous snots like@themonosynaptic can’t tolerate Jim Bean or wisconsin cheeses. If they can’t brag about how much they over paid (on credit) for imported fungus, how will they look down their noses at the rest of the USA?