Officially finalized on Wednesday after the WTO made a final ruling, the US plans to levy $7.5 billion in tariffs on luxury goods against the EU. Though European leaders have called for resolution without new tariffs, as the US also gave illegal subsidies to Boeing, there has been no settlement beyond the tariffs, so far.
“For years, Europe has been providing massive subsidies to Airbus that have seriously injured the U.S. aerospace industry and our workers,” Trade Representative Robert Lighthizer said in a statement Wednesday.
The Scotch whisky industry, which exports about $1.2 billion in product to the US every year, is being hit especially hard on these tariffs. Analysts expect there to be a tit-for-tat of tariffs that could continue to escalate in the same way that trade disputes between the US and China have. Tariffs are expected on October 18, 2019 and will impact aircraft at 10% and 25% on agricultural and other goods mostly from France, Germany, Spain and the UK.
A full list of items covered has been published by the USTR, with the stipulation from the US administration that they can raise the tariff amounts at any time, or change the products affected. The reciprocal tariffs against the US for the same type of illegal subsidies in support of Boeing are expected to reach upwards of $20 billion, according to the European Commission.
The concerns over global trade, which is slowing under the uncertainty of trade negotiations between the US and the rest of the world, could cause a global recession if regulations aren’t eased by one side of this dispute. It is our hope that a settlement between both parties can be reached before extensive tariffs become leveled and a solution can be reached. The $7.5 billion award represents the highest settlement ever grated by the WTO for this type of action and we’re watching for the final word on the settlement against the US for helping Boeing illegally.