Trump Eyes More Airbus Tariffs: Hey, Why Not?

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Trump is on a Tariff stampede again. He went after Brazil and Argentina today and now has his eyes on the EU.

Please consider U.S. May Increase Tariffs After WTO Rejects EU Claims Over Airbus.

The World Trade Organization on Monday rejected European Union claims that it no longer provides subsidies to planemaker Airbus, prompting the United States to say it could increase retaliatory tariffs on a wider range of European goods.

U.S. Trade Representative Robert Lighthizer said the decision affirmed that European subsidies to Airbus continued to harm the U.S. aerospace industry, and strong action was required to eliminate such market-distorting subsidies.

The United States was in October awarded the right to impose tariffs on $7.5 billion of annual EU imports in its case against Airbus. It went ahead with partial tariffs on most Airbus jets and products from cheese to olives and single-malt whisky.

Hey, Why Not?

  1. Tariffs are economically foolish in general.
  2. The WTO has ruled the US is guilty of subsidizing Boeing.
  3. EU retaliation rights are due next year. Amounts expected to be similar.

This dispute has been going on for 15 years.

Has anyone won but the lawyers?

Digital Tax Retaliation

The New York Times reports French Wine Could Face 100% Tariffs as Trump Confronts France Over Tech Taxes.

The BBC reports US Readies Retaliation to French Tech Tax.

The US is preparing tariffs on $2.4bn (£1.85bn) worth of French exports as retaliation against the country's new digital services tax. The items that could face tariffs at rates up to 100% include cheese, sparkling wine, make-up and handbags.

The [digital] tax will go into effect retroactively from early 2019 and is expected to raise about €400m this year. About 30 companies are expected to pay it, mostly US firms such as Alphabet, Apple, Facebook, Amazon and Microsoft.

Amazon has already responded by raising fees for French businesses by 3%.

Steel Tariffs

Meanwhile, in a surprise Tweet today, Trump Restores Steel and Aluminum Tariffs on Brazil and Argentina.

Tariffs will raise the price of steel hurting US car manufacturers still reeling over the GM strike and the trade war with China.

Trade-Related Recession Warnings

  1. Today we had a trade-related recession warning as the ISM Contracted for the 4th Consecutive Month.
  2. Also recall that Freight Volumes Negative YoY for 11th Straight Month.
  3. Finally, China was once very dependent on US chips for its phones. The Latest Chinese Phones Have No US Parts.

China found other suppliers after Trump cut off supplies in his trade war.

He has since lifted the ban, but now it's too late.

Live and Not Learn

So, what can possibly go wrong with more tariffs?

Apparently nothing.

Mike "Mish" Shedlock

Comments (13)
No. 1-6
Realist
Realist

I agree with everything you said; except the recession coming. Though Trump might go even more bananas with Tariffs, and cause a recession eventually.

Zardoz
Zardoz

More pump and dump tariffs. Look for them to be rescinded after the cronies make their money.

Webej
Webej

Didn't that chest in the Trump meme feature Raging Bull [in the China Shop]?

America's military budget are the greatest corporate subsidies in the history of the world, but they don't think they are subsidies.

SMF
SMF

FYI, the politically important A380 program was a huge loss to Airbus, but not many talk about it. It is known in aviation circles that Europe has used Airbus mostly as a jobs program rather than profit motive.

Maximus_Minimus
Maximus_Minimus

I bet re-certification of Boeing 323 Max by the European Aviation Authority would take just a bit longer due to this.

Sechel
Sechel

Well Trump is right about one thing, Boeing would sell more airplanes if Airbus didn't exist or was saddled with tariffs. What's wrong with some more 737's?