Please consider U.S. May Increase Tariffs After WTO Rejects EU Claims Over Airbus.

The World Trade Organization on Monday rejected European Union claims that it no longer provides subsidies to planemaker Airbus, prompting the United States to say it could increase retaliatory tariffs on a wider range of European goods.

U.S. Trade Representative Robert Lighthizer said the decision affirmed that European subsidies to Airbus continued to harm the U.S. aerospace industry, and strong action was required to eliminate such market-distorting subsidies.

The United States was in October awarded the right to impose tariffs on $7.5 billion of annual EU imports in its case against Airbus. It went ahead with partial tariffs on most Airbus jets and products from cheese to olives and single-malt whisky.

Hey, Why Not?

  1. Tariffs are economically foolish in general.
  2. The WTO has ruled the US is guilty of subsidizing Boeing.
  3. EU retaliation rights are due next year. Amounts expected to be similar.

This dispute has been going on for 15 years.

Has anyone won but the lawyers?

Digital Tax Retaliation

The New York Times reports French Wine Could Face 100% Tariffs as Trump Confronts France Over Tech Taxes.

The BBC reports US Readies Retaliation to French Tech Tax.

The US is preparing tariffs on $2.4bn (£1.85bn) worth of French exports as retaliation against the country's new digital services tax. The items that could face tariffs at rates up to 100% include cheese, sparkling wine, make-up and handbags.


The [digital] tax will go into effect retroactively from early 2019 and is expected to raise about €400m this year. About 30 companies are expected to pay it, mostly US firms such as Alphabet, Apple, Facebook, Amazon and Microsoft.

Amazon has already responded by raising fees for French businesses by 3%.

Steel Tariffs

Meanwhile, in a surprise Tweet today, Trump Restores Steel and Aluminum Tariffs on Brazil and Argentina.

Tariffs will raise the price of steel hurting US car manufacturers still reeling over the GM strike and the trade war with China.

Trade-Related Recession Warnings

  1. Today we had a trade-related recession warning as the ISM Contracted for the 4th Consecutive Month.
  2. Also recall that Freight Volumes Negative YoY for 11th Straight Month.
  3. Finally, China was once very dependent on US chips for its phones. The Latest Chinese Phones Have No US Parts.

China found other suppliers after Trump cut off supplies in his trade war.

He has since lifted the ban, but now it's too late.

Live and Not Learn

So, what can possibly go wrong with more tariffs?

Apparently nothing.

Mike "Mish" Shedlock

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Tariff Man Sets Sights on Airbus, German Cars, EU in General

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The FAA found a new wiring issue. More delays coming and suppliers are hurting. Airbus has benefited. Can't have that.

Trump Regrets Not Imposing Higher Tariffs on China: Well, Do It Then!

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