Before sitting at the trade negotiating table, the European Union and the United States may have to grab on to subsidies from Boeing and Airbus.
On Friday, 12 U.S. Eastern Time, Reuters quoted European Union diplomats as saying that the European Commission had drafted a list of imported U.S. goods worth about 20 billion euros (about 22.6 billion US dollars), possibly imposing tariffs on aircraft manufacturerssubsidies. The gross value of specific commodities will be determined by arbitration by the World Trade Organization (WTO).
Since then, Bloomberg has said that the EU is considering imposing tariffs on 10.2 billion euros and about $11.5 billion of US goods, including handbags, helicopters, food, tractors, video game machines, motorcycle parts, cotton, orange juice and tomato sauce, against alleged subsidies. Wall Street has found that the total value of this taxable commodity is roughly the same as what the United States has threatened to impose on the European Union.
The Trump administration is planning to impose high tariffs on a number of EU products, including commercial aircraft, cheese and wine, ski suits and motorcycles, in response to the economic damage to the United States caused by EU subsidies to Airbus, the U.S. Trade Representatives office announced Monday.
At the beginning of the statement, the Office of Trade Representatives said it had repeatedly found that EU subsidies to Airbus had a negative impact on the United States, and estimated that the United States suffered as much as $11 billion a year from EU subsidies. The amount will be subject to arbitration at the WTO. The results of the arbitration are expected to be published this summer.
Trump also tweeted Tuesday that the United States will impose tariffs on the EUs $11 billion products! The European Union has been taking advantage of the United States in trade for many years. It will stop soon!
On Tuesday, the European Commission said that the $11 billion figure proposed by the United States was far higher than that allowed by the WTO, and the strength of the measures on which they are based has been greatly exaggerated. EU diplomats said that the EU will invite WTO arbitrators to confirm the EUs right to retaliate with regard to US illegal subsidies to Boeing. At present, however, the EU is open to negotiations with the United States.
Shares of the two aircraft manufacturers did not fluctuate significantly after Fridays Reuters news. Paris-listed Airbus shares rose by about 0.9% and Nasdaq-listed Boeing by about 1.8%.
At present, the most direct impact of the tariff war is the trade negotiations between the United States and the European Union.
In July last year, President Trump and the European Commission Juncker reached an agreement not to impose tariffs on European Union vehicles imported to the United States while working to improve economic relations, thus ending the months-long trade deadlock. The EU is in the final stage of negotiations with the Trump Government on the 30 authorization clause for tariffs on industrial products (zero tariffs, zero non-tariff barriers and zero subsidies).
Within the European Union, the European Commission and Germany hope to start negotiations as soon as possible. But some countries, led by France, are skeptical about the value of negotiations with the United States. There is widespread concern that if trade talks fail to start as scheduled, Trump may retaliate on auto tariffs.
Earlier on Friday, Wall Street reported that the Financial Times said the European Union agreed to vote on whether to authorize the European Commission to negotiate with the United States next Monday without discussion, which would pave the way for an agreement to eliminate tariffs on industrial products.
The motive of the tariff war is not simple
In fact, the latest WTO ruling that may have triggered the tariff war is that on March 29, the WTO ruled in the nearly 15-year-old Boeing Airbus lawsuit that the United States failed to implement the WTOs decision in 2012 to end subsidies to Boeing, making the EU and Airbus seem to have won the game.
Wall Street MembersExclusive Article The Emerging Tariff War between Europe and America? Appearance is always simpler than the truth. Later, commented that in the matter of Boeing and Airbus State Subsidies, both sides are objectively laughing at each other. But behind the car tariff plus Boeing Airbus farce, the United States has a deeper consideration. Germany and Russia are forming an energy economic community, and the United States is more afraid of the strategic prospects of the Eurasian Continental Strategic Community.
Source: Wall Street Editor-in-Charge: Qian Mingxiao_NBJ10675