Trump Threatens to Open a New Front in His Trade War

Written by SK Ashby

Trump's trade representative recommend that he impose additional tariffs on the European Union (EU) seemingly out of nowhere yesterday evening.

The reason? Because the EU subsidizes Airbus, Trump's trade representative Robert Lighthizer says.

WASHINGTON (Reuters) - The U.S. Trade Representative on Monday proposed a list of European Union products ranging from large commercial aircraft and parts to dairy products and wine on which to slap tariffs as retaliation for European aircraft subsidies. [...]

“Our ultimate goal is to reach an agreement with the EU to end all WTO-inconsistent subsidies to large civil aircraft. When the EU ends these harmful subsidies, the additional U.S. duties imposed in response can be lifted,” U.S. Trade Representative Robert Lighthizer said in the statement.

There's a lot going on here.

First of all, if you've been following along, you know that the Trump regime has been openly contemptuous toward the World Trade Organization (WTO). Although the United States has always won far more cases than it loses at the WTO, the Trump regime has called the WTO illegitimate and refused to appoint new judges to vacant seats on the WTO's review board.

For the Trump regime to approvingly-cite the WTO to justify imposing tariffs on the EU is laughable.

Second of all, we subsidize a great many things in the United States including Airbus's closest competitor Boeing. Republicans passed the mother of all subsidies a little more than a year ago when they cut corporate taxes by $1.5 trillion. Many American companies pay no taxes at all and some of those that don't still receive a check in the mail.

If Trump is going to open this new front in his global trade war, we can expect to see it in July or August after the list of products they will impose tariffs on is finalized. And the European Union will retaliate, of course.