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?
- Tariffs are economically foolish in general.
- The WTO has ruled the US is guilty of subsidizing Boeing.
- 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
- Today we had a trade-related recession warning as the ISM Contracted for the 4th Consecutive Month.
- Also recall that Freight Volumes Negative YoY for 11th Straight Month.
- 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
We have a huge desert in Arizona covered in planes that no one wants to use… and lots of them are recent. We have airports that are a global embarassment, surrounded by highways that are falling down.
Is JFK airport a bigger joke than O’Hare? Does LAX top them both for construction incompetence and corruption?
Other than subsidizing unions (private AND public sector) — there is no reason for more more more of this crud. Its 110% politics.
Why should US taxpayers subsidize both US bloat AND also subsidize European bloat too? Why can’t the deadbeats in Europe subsidize their own bloat? We have a surplus already.
Just ban Airbus completely. Don’t argue silly economics, because if economics mattered no one would buy new planes. Be a grown up and call it what it is: welfare. Europe should pay their own welfare. The US should pay its welfare.
Stop pretending like this has something to do with trade. It doesn’t
I bet re-certification of Boeing 323 Max by the European Aviation Authority would take just a bit longer due to this.
FYI, the politically important A380 program was a huge loss to Airbus, but not many talk about it. It is known in aviation circles that Europe has used Airbus mostly as a jobs program rather than profit motive.
Not quite. What was Airbus supposed to do? Boeing would have
monopoly in large aircraft, and cross subsidize the rest? It was a flop because of its huge size. Perhaps if there wasn’t government subsidy, it would be smaller and healthier.
Didn’t that chest in the Trump meme feature Raging Bull [in the China Shop]?
America’s military budget are the greatest corporate subsidies in the history of the world, but they don’t think they are subsidies.
More pump and dump tariffs. Look for them to be rescinded after the cronies make their money.
Total hypocrisy. Airbus has a MUCH BIGGER CLAIM AGAINST BOEING ALREADY AWARDED that will be available from WTO rules in approx 6 months. THEY will be able to tariff FAR MORE AGAINST US. Why be stupid arrogant when it’ll be more than undone next year? Oh, b/e you’re an orange maniac narcist who can hardly keep attention for anything beyond transactional behavior.