The Trump administration’s decision to levy $7.5 billion in tariffs on European goods, officially sanctioned by the WTO following its judgment in favor of Boeing in a trade dispute over European subsidies to Airbus, will not go unanswered, according to German foreign affairs minister Heiko Maas. The Europeans feel especially compelled to respond as the latest round of tariffs, set to be finalized on October 18, come on top of previous U.S. tariffs (not approved by the WTO) on steel.
- The 25% tariffs on wine, cheese, and luxury goods (among other items) are already eliciting howls of protest from French vintners, according to Reuters: French wine exporters’ association chief Antoine Leccia was quoted as say, “We feel hijacked by these retaliatory measures that go against free trade.” It’s calculated they will raise the price of French wine by $5 to $10 per bottle, forcing French exporters to cut prices or risk losing market share.
- Not least of the complaints of French agricultural producers is the fact that their products are being targeted when they have nothing to do with the aerospace industry, or indeed manufacturing more broadly. In another report Reuters quotes Giuseppe Ambrosi, president of Italian dairy association Assolatte: “What is happening is absurd; we have to see if the American customers are willing to accept the price increase.” Assolatte calculates that American consumers will have to pay $5 more per kilo for parmesan cheese.
- Under pressure from the powerful agricultural lobby, the EU is preparing to hit back. Maas told the German press: “The European Union now will have to react and, after obtaining the approval of the World Trade Organisation, probably impose punitive tariffs as well.”
- Maas also called for more negotiations to resolve the dispute on Twitter: “Europe is united on this question. We remain ready to negotiate common rules for subsidies in the aviation industry. We can still prevent further damage.”