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.
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?