US announces latest tariffs on EU products
In retaliation for EU subsidies on Airbus, a European aircraft manufacturer, the US administration has introduced tariffs worth an estimated $7.5 billion. These tariffs have been approved by the World Trade Organisation and are due to take effect later this month.
The new tariffs will be between 10 and 25% and will affect a range of European products. The full list includes many products manufactured across Europe, including:
- French wine
- Italian cheese
- Single-malt Scotch whisky
- UK-made cashmere items
- Olives from France, Germany and Spain
- German coffee
- EU-produced pork sausages
The USTR said that the WTO ruling was a “significant victory” for the US. Previously, the WTO found that both Airbus and its US rival, Boeing, had been in receipt of billions of dollars in illegal subsidies, making it one of the world’s largest trade disputes.
However, there are fears that it could lead to a transatlantic trade war or cause further problems for the global economy. Trade relations between the US and EU are already under pressure. Last year, a provisional agreement was reached, which the EU said was a “red line”.
A statement said, “we agreed today, first of all, to work together towards zero tariffs, zero non-tariff barriers, and zero subsidies on non-auto industrial goods. We will also work to reduce barriers and increase trade in services, chemicals, pharmaceuticals, medical products, as well as soybeans.”
In addition, Juncker and Trump also spoke about the possibility of WTO reforms, saying: “We will work closely together with like-minded partners to reform the WTO and to address unfair trading practices.”
According to German Chancellor Angela Merkel, this latest decision is “shortsighted and counterproductive” and would be damaging to many European countries, including Germany.
Foreign Minister Heiko Maas added: “The EU will now have to react and (…) will probably impose punitive tariffs. We think this is wrong because workers and consumers on both sides of the Atlantic are paying the price.”