US proposes tariffs on $11bn of EU products

[Neverna]

The US is considering imposing tariffs on about $11bn (£8.4bn) worth of goods from the European Union in response to subsidies that support Airbus.

The World Trade Organization (WTO) has found that the subsidies have an adverse impact on the US.

Aircraft and cheese are among the products that could be hit by tariffs, the US Trade Representative (USTR) said.

The move would mark an escalation in trade tensions between the US and the EU.

The USTR said the value of goods that would be targeted with tariffs was subject to arbitration at the WTO, the result of which is expected in a few months.

"This case has been in litigation for 14 years, and the time has come for action. The administration is preparing to respond immediately when the WTO issues its finding on the value of US countermeasures," said US Trade Representative Robert Lighthizer.

"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 US duties imposed in response can be lifted."

A preliminary list of goods, covering a wide range of items, has been issued for public consultation. For example, the following are being considered for additional tariffs if they come from any of the 28 EU states.

The WTO has ruled that the EU and the four governments involved in Airbus have failed to comply with an earlier ruling that they should withdraw contested subsidies and the US has asked for authorisation to retaliate to the tune of $11bn.

The US wants to act quickly when the WTO arbitrator makes a ruling. So far this action seems to be following the WTO rule book.

More here:
https://www.bbc.com/news/business-47862622

[Buckaroo Banzai]

IMO, the US proposes none of the above.
trump proposes the above.
If I was them I will just play a wait and delay game. trump will be gone soon enough (about two years) , and hopefully sanity will return.
Tariffs are easy to implement but if they become stractural to businesses, difficult to remove as business and economies become dependant on them.
IMO the best course is to ignore them , make the minimal structural changes possible as a defence , and sanity should return soon enough, sooner if a patriot exercising his second amendment right could get close to trump.

[harrybarracuda]

The EU has hit back at new U.S. proposals to target European goods with tariffs, following a World Trade Organization (WTO) ruling over subsidies for Airbus.

Trade tensions between the EU and U.S. flared Monday after the U.S. said it’s considering $11 billion worth of retaliatory tariffs on a range of goods in response to illegal subsidies the EU granted to the aerospace firm.



The WTO ruled last year that these allowances had caused “adverse effects” to the U.S., with the decision coming after a long-running litigation battle between the Washington and Brussels over their respective aviation giants.


Shares of Airbus were trading 2.3% lower Tuesday after the tariffs were proposed. A spokesman for the company said there is no legal basis for the U.S. move to impose sanctions, and said the EU had complied with WTO rulings. The European Commission criticized the proposals.

“The EU is confident that the level of countermeasures on which the notice is based is greatly exaggerated. The amount of WTO authorized retaliation can only be determined by the WTO-appointed arbitrator,” a Commission spokesman said.


On Monday, the Office of the U.S. Trade Representative said it would slap tariffs on EU goods ranging from aircraft to fish, dairy products to binoculars, olive oil and wine, according to a preliminary list.

It said it estimates “the harm from the EU subsidies as $11 billion in trade each year,” although the amount is subject to an arbitration at the WTO, the result of which is expected to be issued this summer.


“This case has been in litigation for 14 years, and the time has come for action. The Administration is preparing to respond immediately when the WTO issues its finding on the value of U.S. countermeasures,” U.S. Trade Representative Robert Lighthizer said in a statement Monday.

Double standards

Both sides have now been found guilty of paying billions of dollars of subsidies to gain advantage in the global aircraft manufacturing business.
The EU is still waiting to hear from the WTO about what “retaliation rights” it has after the organization found in 2012 that Boeing too had received billions of dollars in illegal subsidies that had been to the detriment of Airbus. The WTO also ruled in March that the U.S. had failed to comply fully with its earlier ruling to remove all illegal subsidies that Boeing had received.

The European Commission spokesman also said Tuesday that Brussels is ready to retaliate in kind, noting that in the parallel Boeing dispute, “the determination of EU retaliation rights is also coming closer and the EU will request the WTO-appointed arbitrator to determine the EU’s retaliation rights.”

Some analysts have accused the U.S. of double standards. GAM’s Investment Director for Global Equities, Ali Miremadi, said the U.S.′ tariff proposal was “quite bold.”

“I have to say the country which is the home to Boeing accusing Europe of state subsidies for Airbus — this is quite bold,” he told CNBC’s “Squawk Box Europe” Tuesday.

“It’s very well established that both Boeing and Airbus exist only at the discretion of their respective hosts or host governments.”

President Donald Trump tweeted Tuesday that “the EU has taken advantage of the U.S. on trade for many years.”


UBS’ Global Wealth Management’s Chief Economist Paul Donovan noted wryly that Trump had accepted the WTO ruling much more readily than usual.

“The WTO has ruled that Airbus received unfair subsidies from the EU and U.S. President Trump has, rather unusually, decided to agree with the WTO,” Donovan said in a regular podcast Tuesday.

“Whether U.S. President Trump would be quite so willing to accept the verdict of the WTO about unfair assistance from the U.S. to Boeing, which is an ongoing case, is a rather different matter.”


Trade wars

The latest U.S. threat comes as tensions are already simmering with the EU over possible tariffs on its cars and auto parts. A final decision has not yet been made.

The U.S. is currently negotiating with China over a trade deal after almost a year of escalating retaliatory tariffs on each other’s imports.

Europe could be next in line for some rough treatment.

“Even once we are done with the U.S. and China, the U.S. will turn to Europe,” Laurence Boone, chief economist at OECD, told CNBC’s Steve Sedgwick at the Ambrosetti Workshop in Italy on Friday.

“So, I think by undermining the multi-lateral rules-based system on trade, we have just injected a massive dose of uncertainty in the world that will stay with us for a long time.”


Strategists warn that tariffs could not come at a worse time for the EU, with growth and industrial production looking vulnerable. Tariffs “are still a very important dark cloud when it comes to European growth,” Luis Costa, head of CEEMEA FX strategy at Citi, told CNBC Tuesday.

“This is coming at a time when German factory orders are down by 4 to 5 percent and output is still in danger, some of those regional manufacturing indices are still in contraction territory, so this is coming at a very delicate time,” he told CNBC’s “Squawk Box Europe.”

https://www.cnbc.com/2019/04/09/europe-slams-latest-us-tariff-threat-as-greatly-exaggerated.html

[lom]

It's all about Boeing losing orders for the 737MAX.

[Hugh Cow]

Trump has helped Boeings falling share price. What a guy.

[Neverna]

Tit for tat?


EU proposes tariffs on £15bn of US products in Boeing row

The EU has proposed tariffs on $20bn (£15bn) of US goods in a long-running dispute over Boeing aircraft subsidies.

The proposal comes after the WTO said earlier this month that the US had failed to remove some Boeing subsidies.

The EU move comes after the US said it was considering tariffs on about $11bn (£8.4bn) worth of EU goods in response to Airbus subsidies.

And it comes after the EU approved plans in April for trade talks with the US designed to reduce trade barriers.

EU Trade Commissioner Cecilia Malmström said: "European companies must be able to compete on fair and equal terms.

"The recent WTO ruling on US subsidies for Boeing is important in this respect. We must continue to defend a level-playing field for our industry."

The proposed tariffs cover a range of products from aircraft to chemicals and food products including frozen fish, citrus fruit, and ketchup.

Dogfight

The US and the EU have been battling for almost 15 years at the World Trade Organization over subsidies given to US planemaker Boeing and its European rival Airbus.

After partial victories for both sides, each is asking a WTO arbitrator to determine the level of countermeasures they can impose on the other.

The Trump administration last week proposed targeting a seven-page list of EU products for tariffs, ranging from large aircraft to dairy products and wine, to counteract the harm from EU subsidies for Airbus that are worth an estimated $11bn.

The EU has responded with its own 11-page list of US imports, including agricultural produce and dried fruit, to planes, tobacco, handbags, suitcases, tractors, helicopters and video game consoles.

The published list will now be open to consultation until 31 May and could then be revised.

"The EU remains open for discussions with the US, provided these are without preconditions and aim at a fair outcome," Ms Malmström said.

In both cases, WTO arbitrators have yet to set an amount, but the US case against Airbus is more advanced, with a ruling possible in June or July. The EU case against Boeing could come early in 2020.

Both sides have said they would prefer a settlement that did not lead to tariffs being imposed.

https://www.bbc.com/news/business-47962454

[harrybarracuda]

So much winning.

*Yawn*