On Friday, the United States of America has imposed tariffs of recorded $7.5 billion on the European Union (EU) goods, despite threats of retaliation, with French Wine, Airbus, and Scottish Whiskeys among the main targets.
The imposed tariffs took effect just after midnight in Washington, came after discussion between the US trade representative and EU officials has failed to win a last-minute pardon.
The WTO-endorsed attack from President Donald Trump also comes as America is mired in an ongoing trade war with China and it could risk further undermining the global economy.
In the line of fire are civilian aircraft from France, Britain, Spain, and Germany – these nations have formed Airbus, which will now cost 10 percent extra when imported to America.
The tariffs further target consumer products, mainly French Wine, which President Trump had promised to attack in recent months. Therefore, Wine from France, Germany, and Spain will now face 25 percent tariffs.
While speaking in Washington hours earlier the tariffs were due to come into effect, French Economy Minister Bruno Le Maire has warned that this move would have serious consequences.
Le Maire told sources, “Europe is ready to retaliate, in the framework of course of the WTO,” shortly after meeting with the United States Treasury Secretary Steven Mnuchin on the sidelines of the International Monetary Fund (IMF) annual meetings.
He continued, “These decisions would have very negative consequences both from an economic and a political point of view.”
Bruno Le Maire was due to meet the United States Trade Representative Robert Lighthizer today.
He further warned the United States against starting another front in its trade war and again called for a negotiated solution.
At a tenure when the global economy is slowing down, Le Maire said that “I think that our responsibility is to do our best to avoid that kind of conflict.”
The EU has long advocated negotiation over war and they themselves will be to issue tariffs next year to punish America for funding Boeing.
However, the EU officials had offered to call a ceasefire on subsidies for planemakers, in which both sides would permit fault and permit to curtail state aid – to no avail. Both sides have been involved in a row on the subsidies for 15-years.
The tariffs were imposed a few days after the US was offered formal go-ahead by the WTO (World Trade Organization).
On Wednesday, President Trump has singled out the EU for being unfair with the United States on trade but said the door was open for negotiating a settlement.
The EU mainly feared above all that the US President might impose heavy duties on imports of European Vehicles around mid-November, which would be a serious jolt for the German Automotive Sector, even if BMW or Volkswagen also manufacturer in America.
President Trump said, “Our products are very hard to bring in (to Europe).”
The Airbus-Boeing case is just one of several topics tending tensions that speedily descended into bitterness when Donald Trump took charge of the office in 2017.
The US President further embraced a protectionist agenda, imposing import duties on aluminum and steel from the EU and other allies, further threatened tariffs on cars.
Trader Groups in Europe, such as German tool manufacturers, Winemakers, and Whisky producers in Scotland have kept an uproar of protest, asked reverse tack from Washington.
The European Commission President Jean-Claude Juncker has agreed in July last year to a ceasefire in the conflict to hold trade discussions that have so far led nowhere.
The epic legal fight between Boeing and Airbus at the WTO started in 2004 when America accused France, Britain, Spain, and Germany of offering grats and illegal subsidies to support the production of a wide variety of Airbus Products.
In 2005, the EU has reported that Boeing had received $19.1 billion of prohibited subsidies from 1989 to 2006 from several branches of the American Government.
Both the cases were then knotted up in a legal fen, with each side being offered partially vindication after a long series of counter appeals and appeals.