FederalIssuesTradePresident Trump Announces New Set of Tariffs on the European Union

The Trump administration's strategy of using tariffs as bargaining tools continues as the U.S. gains a WTO victory over the E.U.
October 8, 2019
President Trump announced last week that in addition to the long-established tariffs on China and once threatened tariffs on Mexico, he would be implementing tariffs on Europe. The new set of tariffs are set to start on October 18. 

In this instance, President Trump has the blessing from the World Trade Organization after it sided with the United States in the Airbus-EU trade dispute.

Levied on over $7.5 billion worth of goods, the decision stems from the European Union’s subsidies given to the European airplane manufacturer, Airbus. Tariffs include a 10 percent duty on aircraft, 25 percent on malt whiskey, and 25 percent on various cheeses.

Airbus’ main competitor, of course, is the U.S.-based Boeing. 

On Sunday, the New York Times reported that this is a proxy war of sorts between the two aeronautical manufacturers. The Chicago-based manufacturer reportedly urged the President to enforce the WTO decision to clamp down on the EU’s subsidies to Airbus.

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U.S. Trade Representative (USTR) Robert Lighthizer said, “Finally, after 15 years of litigation, the WTO has confirmed that the United States is entitled to impose countermeasures in response to the EU’s illegal subsidies.” 

Negotiations between the two sides are planned.

The USTR’s list of tariffed goods can be found here and in addition to the above-mentioned products, includes coffee, numerous types of food, and numerous types of clothing.

President Trump called it a “big win” during a joint press conference with the Finnish President.

Trade disputes between the president and the EU are not new. Last year the administration levied tariffs on imports of steel and aluminum, which resulted in retaliatory duties from the EU on goods such as bourbon and motorcycles. 

Tariffs were also threatened on automobiles from Europe, but were delayed in May.

A WTO panel must sign off on this new set of tariffs before they can take effect.

Airbus has a helicopter manufacturing plant in Grand Prairie and a logistics facility at the DFW airport.

In other trade-related news, the President signed a trade agreement with Japan — considered a replacement for Trans-Pacific Partnership which Trump pulled out of in 2017. For some agricultural products such as rice and in-part barley, the new deal is less beneficial than the TPP would have been.

Trump called it “a game-changer for our farmers and our ranchers.” 

But the deal does not include products that amount to the largest share of trade between the two countries such as cars, airplanes, propane gas, and semiconductors.

With the president making trade a key part of his presidency, it has become an ever-evolving issue and new developments seem to occur every day. 

The Texan will continue monitoring new trade developments and their potential impact on the Texas economy.


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Brad Johnson

Brad Johnson is an Ohio native who graduated from the University of Cincinnati in 2017. He is an avid sports fan who most enjoys watching his favorite teams continue their title drought throughout his cognizant lifetime. In his free time, you may find Brad quoting Monty Python productions and trying to calculate the airspeed velocity of an unladen swallow.