Trade

WTO Green Lights Trump’s Next Tariffs

JM Ashby
Written by JM Ashby

This decision was expected in the last week of September, but the World Trade Organization (WTO) has finally green-lit Trump's next front in his global trade war.

Following up on the WTO's previous ruling that the European Union (EU) illegally subsidized European aerospace giant Airbus, the WTO has ruled that the United States may impose up to $7.5 billion in tariffs on European goods.

From Reuters:

BRUSSELS/LONDON (Reuters) - The United States won approval on Wednesday to impose tariffs on $7.5 billion worth of European goods over illegal EU subsidies handed to Airbus, threatening to trigger a tit-for-tat transatlantic trade war as the global economy falters. [...]

The focus of nervous markets will now shift to Washington where the U.S. Trade Representative is expected to move quickly to narrow down a preliminary list of goods in line for tariffs, a U.S. source said.

The agency's provisional list of products that are eligible to be targeted with tariffs ranges from Airbus jets themselves to helicopters, wine, handbags and cheese.

While I expect we'll see the Trump White House pay lip service to the idea making a deal rather than imposing tariffs, I have little doubt that Trump will impose these tariffs.

Unlike all of the other tariffs he has imposed in his global trade war, Trump can point toward the WTO's decision and say he has the moral and legal authority to impose tariffs on European goods, but that doesn't mean his actions will necessarily be justified.

The WTO has also found that the United States has illegally subsidized Airbus's biggest competitor Boeing and that gives the EU all the reason it needs to match Trump's tariffs with retaliatory tariffs of their own.

I can't fault the WTO for enabling Trump because the WTO did not put Trump in office, but their decisions in this 15-year old dispute comes at a terrible time. No previous administration would have started a trade war over this; they would have found another solution.

The only thing that could possibly prevent Trump from starting a trade war with Europe is the recent news that American manufacturing is now in recession with other parts of the economy likely to follow. Does the Trump regime really want to make things worse?

Trump's cabinet lackeys probably don't want to impose more tariffs, but Trump himself tells us everything is "great" so there's nothing to worry about, right?

  • muselet

    In a sign that Washington plans to fast-track its measures, people familiar with the case said the Trump administration had asked the WTO for an emergency meeting to give the formal ratification needed for tariffs in mid-October.

    Quickly! To the Distractionator!

    The European Commission said U.S. sanctions would be “short-sighted and counterproductive”.

    You don’t say.

    On Tuesday, the head of one of Boeing’s biggest customers, Irish budget airlines group Ryanair (RYA.I), urged the two sides to pull back from the brink of a tariff war and said neither side’s aviation industry would survive a long dispute.

    Even Ryanair—bloody Ryanair, I ask you—understands this is madness.

    Not all analysts see the WTO’s aircraft subsidy row – with its thousands of pages of legal and aeronautical jargon – inflaming broader international trade tensions.

    “In some ways it is a distinct issue from the rest of the Trump trade wars,” said Constantine Fraser of UK research firm TS Lombard.

    “I think the White House is going to be aggressive in pursuing this, but I don’t think there is necessarily any kind of read-through from this to the prospect of tariffs on cars.”

    Some people haven’t been paying attention, have they?

    –alopecia