The shadow of Trump’s new tariffs looms over the EU

The shadow of Trump's new tariffs looms over the EU
US President Donald Trump. EFE

The tariff battle between the US and the European Union (EU) will experience a new chapter this Wednesday, August 12, when President Donald Trump will have to decide whether to take a further step with new levies on various European products, such as wine and olives.

The Office of the United States Foreign Trade Representative (USTR) opened a period of public consultations month ago about the relevance of this new trade pressure measure, which could mean raising current tariffs by between 10% and 25% to the 100%.

Products potentially affected include Scotch whiskey, Spanish and French wine, and Greek and Spanish olives.

Consulted by Revyuh, the office headed by Robert Lighthizer, avoided offering details.

August 12 is the deadline to make a decision about keeping or raising them.

Trump, who has made protectionism one of its political pillars, has not referred to the issue either, although he has insisted on his criticism of the EU, on the grounds that he takes advantage of the US commercially.

Tariffs as a political weapon

Despite Trump’s insistence on the effectiveness of tariffs as a trade weapon, businessmen have been wary, especially in the midst of the serious economic crisis the country is experiencing in the midst of the COVID-19 pandemic.

“At a time when the hospitality industry is fighting for its life, any additional tariff will have catastrophic and aggravating effects in the coming years, a brutal blow to many,” said Michelle Korsmo, the president of the U.S. Wine and Liquor Wholesale Association, in a recent statement.

The shadow of a possible rise grew last week with Trump’s surprise announcement to apply a 10% tariff to aluminium from Canada, just a month after ratifying the new trade agreement between the US, Mexico and Canada.

The move infuriated Canadian Prime Minister Justin Trudeau’s government and stoked Washington’s trade war drums with traditional allies.

The move is the latest episode of the trade dispute between the European Union (EU) and the US in the wake of the subsidy dispute received by European aircraft manufacturer Airbus to the detriment of its US rival Boeing.

In a long-awaited arbitration ruling, the World Trade Organization (WTO) determined last October the adverse effects for Boeing in relation to five aircraft sales campaigns that Airbus won between 2011 and 2013, and that it considered that the US manufacturer had gained from there have been no subsidies for the European.

For that reason, the WHO gave the United States the green light to impose levies on products from the EU and the United Kingdom for about $ 7.5 billion.

In June, Airbus announced that it was waiving preferential conditions in the loans granted by Spain and France for the construction of its A350 aircraft, which were considered by the WTO as illegal aid.

Distrust

Following the adoption of this measure, European Trade Commissioner Phil Hogan asked Washington in July to lift these “unjustified” tariffs.

“The European Union has made specific proposals to reach an agreement negotiated in the protracted transatlantic disputes of civil aircraft manufacturers and remains open to work with the US to reach a fair and balanced solution,” Hogan said.

The EU and the US are traditional allies, but since Trump’s arrival at the White House in January 2017, mutual trust has been broken and both Washington and Brussels view actions on the other side of the Atlantic Ocean with suspicion.