EU is already negotiating with Biden: Trump is imposing punitive tariffs on German wine

Thursday December 31, 2020

EU is already negotiating with Biden
Trump imposes punitive tariffs on German wine

Shortly before his departure, US President Trump turned the penalty screw again. Because of controversial subsidies for Boeing and Airbus, the US and Europe are imposing penalties on each other. Now it hits French cognac and German wine. The EU is already negotiating with Biden.

Shortly before its departure, the government of US President Donald Trump reignited the trade dispute with the EU: In the dispute over subsidies for the aircraft manufacturers Airbus and Boeing, Washington announced new punitive tariffs on French and German products. According to the US Trade Commission (USTR), the tariffs will affect "aircraft components from France and Germany, certain wines, as well as cognacs and other spirits from France and Germany". The US described the new tariffs as a countermeasure against tariffs imposed by the EU, which are unfair.

Both sides have been fighting for 16 years over public aid for the European aircraft manufacturer Airbus and its US competitor Boeing. The World Trade Organization (WTO) allowed the European side in October to impose punitive tariffs on US products worth four billion dollars a year in retaliation for illegal state aid to Boeing.

However, Washington feels that the EU's calculation method puts it at a disadvantage when it comes to levying the punitive tariffs. The EU "used trade data from a time when the volume of trade was significantly reduced due to the terrible effects of Covid-19 on the global economy," said the USTR. "The result of this decision was that Europe was imposing tariffs on many more products than would have been the case in a normal period." In addition, the EU based its decision on tariffs on the trade volume of the EU countries excluding Great Britain. As a result, the punitive tariffs for the US have risen unfairly, argued the USTR.

EU regrets unilateral intervention

The US also received the green light from the WTO in 2019 for surcharges on imports worth $ 7.5 billion due to illegal EU subsidies for Airbus. The US punitive tariffs have so far been directed against products such as wine, cheese and olive oil, alongside Airbus aircraft. Now these have been expanded.

The EU "regretted" the new punitive tariffs against products from Germany and France. The government in Washington had "unilaterally" interrupted ongoing talks with its approach, the EU Commission said in Brussels on Thursday. At the same time, she expressed the hope of being able to resolve the dispute with the government of the future US President Joe Biden.

Airbus criticized the tariffs as "counterproductive", also for the US industry. These testify to a will to "escalate the conflict", to which Europe must react "appropriately", said the European aircraft manufacturer. The Association of French Wine and Spirits Exporters (FEVS) expressed its "anger" and its "bewilderment". The French wine and spirits industry is "being sacrificed for a dispute in the aviation industry", criticized association president César Giron.