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Many favorite European goods hit by new US tariffs

PortandTerminal.com, October 18, 2019

A fresh round of U.S. tariffs on $7.5 billion in European goods takes effect Friday in retaliation for what the World Trade Organization decided were illegal EU subsidies for airplane maker Airbus.

WASHINGTON, DC – The US imposed 25% tariffs on $7.5bn on some favorite goods from the European Union (EU) just after midnight in on October 17th. The EU in response ratcheted up its own 25% tariffs on a host of American products

Here’s what is going to start costing more on both sides of the Atlantic:

Image credit: BBC

Why is this happening?

The WTO ruled in America’s favor that the European Union has been unfairly subsidizing Airbus at Boeing’s expense. Consumers on both sides of the Atlantic will be paying the price.

All of this stems from US concerns that Europe has been unfairly subsidizing its Airbus at the expense of Ameican Boeing.

In 2004 the US filed its first complaint with the World Trade Organization (WTO), arguing that cheap European loans for Airbus amounted to illegal state subsidies.

The WTO decided in favour of the US, which subsequently complained that the EU and certain of its member countries were not in compliance with the decision, prompting years of further wrangling.

The US had sought to impose tariffs on about $11bn in goods. The WTO though cut that figure to $7.5bn.

The US announced its intention to put a 25% tariff on things such as European cheese, wine, olive oil and single malt scotch. Not to be outdone, the EU retaliated by imposing its own 25% tariff on American products such as peanut butter, Harley Davidson motorcycles and more.

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