The World Trade Organization gave US President Donald Trump the approval to impose tariffs on exports worth up to 7.5 billion dollars annually in retaliation for illegal government assistance to Airbus SE.
Thus, it is understood that Wednesday’s ruling is a milestone in the longer-lasting WTO dispute that will further test transatlantic relations, which have deteriorated under Trump’s “America First” approach to ties International It is also an example that Trump obtained a favorable ruling from an organization from which he has threatened to retire.
In this way, one could say that the United States is already in a trade war with China, and any wider outbreak of eye-to-eye tariffs with Europe could threaten a fragile global economy. Thus, the WTO cut its trade growth forecast for this year to the weakest level in a decade on Tuesday, warning against a “destructive recrimination cycle.”
Products belonging to the initial list that will be affected by tariffs
Without a doubt, the decision is one of the final obstacles before the US can announce to which products of the European Union it will be directed with tariffs selected from an initial list that includes airplanes and parts of Airbus, in addition to wines and spirits produced by LVMH, Remy Cointreau SA, Pernod Ricard SA, and Diageo PLC as well as articles made of leather manufactured by Christian Dior SE and Hermes International.
It should be noted that the new tariffs may enter into force after the WTO adopts the report, which is expected to happen at a meeting in Geneva this month.
On the one hand, the Trump administration is considering a particularly harmful commercial weapon known as “carousel” retaliation, which would allow the United States to regularly move around the selected products, which was expressed by people familiar with the deliberations last month. Undoubtedly, that would increase commercial uncertainty and pain for European companies.
On the other hand, the EU will retaliate against tariffs linked to Airbus when the WTO decides at the beginning of next year on the dispute of the block on US subsidies to Boeing Co., according to European Commerce Commissioner Cecilia Malmstrom.
Likewise, Malmstrom accurately stated, “The mutual imposition of countermeasures, however, would only inflict damage on businesses and citizens on both sides of the Atlantic, and harm global trade and the broader aviation industry at a sensitive time”, also add that the bloc is ready to work with the US on a “fair and balanced solution for our respective aircraft industries”.
Source: National Post
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