The United States is considering new tariffs on $3.1 billion of exports from Europe. The tariffs are part of an ongoing feud between the economies over aircraft subsidies. Unfortunately, many of these tariffs are on products Americans love.
If you’re a lover of fine foods, you might be concerned to hear the list of newly tariffed goods. If the U.S. follows through with its plan, then beer, coffee, chocolate, olives, cheese, yogurt, and gin may go up in price. European trucks have also made the list. Additionally, tariffs would apply to airplanes, specifically those from the European company Airbus.
A Longstanding Feud
For the last few months, the United States and the European Union have been caught in a battle over aircraft subsidies. The World Trade Organization (WTO) found that both Europe-based Airbus and the American company Boeing had been receiving government subsidies over the 15 years. Each company received billions of dollars in the form of tax breaks.
Now, both companies, and the governments they represent, seem to be pointing fingers for similar rule-breaking. Each is angry that the other received tax breaks from their respective governments.
Still, it’s important to note that Boeing actually did address their part in the issue a few months ago. Washington State, where much of Boeing’s operations are centered, repealed the unfair tax breaks. This was done in an attempt to avoid European-imposed tariffs.
Airbus Subsidies Deemed Unfair
In October, the WTO ruled that certain countries have been providing Airbus with illegal subsidies and kickbacks. As part of this ruling, the WTO gave the U.S. permission to impose $7.5 billion worth of tariffs on E.U. products.
Later, an investigation found that E.U. countries had continued with the unfair payments to Airbus. This prompted a second round of tariffs. Since the beginning of 2020, the U.S. has increased the tariffs on Airbus from 10% to 15%.
Due to Europe’s flagrant dismissal of the WTO’s rulings, the U.S. is imposing its most aggressive round of tariffs yet. The period for public comment and negotiation will end July 26th. At that point, tariffs could be as high as a whopping 100%.
It is unlikely that the E.U. will take this hit quietly. The WTO is still investigating Boeing for the same crime. If the findings show that the U.S. is guilty, Europe will undoubtedly respond. We can expect to see tariffs placed on U.S. exports to Europe as a result.