Trump to Expand His Trade War With Europe

SK Ashby
Written by SK Ashby

The coronavirus pandemic and Trump's bungled response to it cost over 40 million Americans their jobs and over a million people are still losing their jobs every week, but the Trump regime has apparently decided to expand their global trade war as if everything is normal.

Retailers and businesses in hospitality such as hotels, bars, and restaurants have been hurt the most by Trump's recession and they will be hurt the most again under a package of tariffs the office of Trump's trade representative published yesterday evening.

The new package includes additional tariffs on $3.1 billion in European goods while increasing existing tariffs covering $7.5 billion in goods to 100 percent.

The U.S. Trade Representative wants to impose new tariffs on European exports like olives, beer, gin and trucks, while increasing duties on products including aircrafts, cheese and yogurt, according to a notice published late Tuesday evening. The statement lays out a month-long public comment period ending July 26. [...]

If the U.S. follows through with its plan, it could hammer European luxury brands like Givenchy and Hermes -- which produce leather goods -- and Remy Cointreau and Pernod Ricard, which make cognac and champagne. LVMH Moet Hennessy Louis Vuitton would be particularly vulnerable because it produces a wide array of these products.

The new duties might be as high as 100%, which would double the price of such products for U.S. importers and may prevent their entry into the U.S. entirely.

And why on earth would they do this at a time like this when the related industries are already in shambles?

This is apparently a preemptive response to the World Trade Organization's (WTO) expected ruling in favor of tariffs on American goods in response to illegal subsidies for Boeing. The WTO already ruled that we illegally subsidize Boeing just as the European Union illegally subsidizes Airbus, but the Trump regime are no strangers to hypocrisy.

In October the U.S. gained the upper hand when the WTO authorized President Donald Trump to retaliate against $7.5 billion worth of EU exports in response to Europe’s illegal subsidies to Airbus SE. Next month the WTO is expected to deliver a retaliation award to the EU in its separate but related case against U.S. subsidies to the Boeing Co. [...]

Lighthizer said his goal in increasing tariffs is to persuade the EU to agree to a settlement. But talks between the U.S. and the EU have floundered this year, and now the EU is preparing to retaliate with new tariffs against an array of politically sensitive U.S. industries.

There's no good reasons I can think of for European officials to give in to Trump's bullying just a few months before he may be kicked out the White House. Economic expectations have been thrown out the window in any case and the world is going have to sort things out when he's gone.

If Trump is reelected, however, the world is fucked.

And speaking of getting screwed -- these specific tariffs really stood out to me:

Tariffs on British gin could increase U.S. prices at peak season for gin-and-tonics, potentially hurting British spirits companies like Diageo Plc, the London-based maker of Tanqueray; James Burrough, the maker of Beefeater gin; and William Grant & Sons, the maker of Hendricks gin.

Boris Johnson may not want to count on a trade deal with the United States to save him from the political consequences of the Brexit.

Public comments on this package of tariffs will remain open for the next month and they could be imposed in August. They may scale back or alter some of the tariffs, but I expect we'll see most of them implemented.