US widens trade war, slaps tariffs on $7.5 B European imports

WASHINGTON (AP) — The Trump administration plans to impose tariffs on $7.5 billion worth of European imports – from gouda cheese to single-malt whiskey to large aircraft – beginning Oct. 18 to retaliate against illegal European Union subsidies for aviation giant Airbus.

The latest escalation in the administration’s tariffs will open a new chapter in the trade wars that are depressing the world economy and heightening fears of a global recession.

It comes just as the Trump administration is in the midst of trying to negotiate a resolution to its high-stakes trade war with China.

The administration received a green light for its latest import taxes Wednesday from the World Trade Organization,

which ruled that the US could impose the tariffs as retaliation for illegal aid that the 28-country EU gave to Airbus in its competition with its American rival Boeing.

The WTO announcement culminates a 15-year fight a over 1 0 EU percent subsidies import for tax; Airbus. other p ro d ucts EU on aircraft the list will be face hit with 25 percent tariffs.

The administration insists it has the authority to increase the tariffs whenever it wants or to later add products in its list.

President Donald Trump called the WTO ruling a “big win for the US” and asserted that it happened because WTO officials “want to make sure I’m happy.”

“The WTO has been much better to us since I’ve been president because they understand they can’t get away with what they’ve been getting away with for so many years, which is ripping off the US,” Trump said at a joint White House news conference with President Sauli Niinisto of Finland.

Stock markets around the world, which were already down on concerns for the world economy, added to their losses on the news.

Wednesday’s award follows a WTO ruling in May 2018 that the EU had illegally helped Airbus with subsidies. It does not, however, end the longrunning trans-Atlantic dispute over aircraft.

WTO arbitrators are expected to rule next year on how much the EU can impose in tariffs following a separate decision that went against Boeing.

The EU’s top trade official had said the bloc would prefer to reach a settlement with the United States to avoid a tariff war but that it will respond if Trump imposes new duties on EU products.

Speaking after the WTO’s ruling Wednesday, but before the Trump administration announced the new tariffs, EU Trade commissioner Cecilia Malmstrom said a tariff war “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.”

“If the US decides to impose WTO authorized countermeasures, it will be pushing the EU into a situation where we will have no other option than to do the same,” she said.

Italian Foreign Minister Luigi Di Maio, who was meeting with US Secretary of State Mike Pompeo in Rome on Wednesday, vowed to “defend our businesses.” Italian wine and cheeses could face an impact from US tariffs.

Unlike Trump’s unilateral tariffs on billions of dollarsworth of steel, aluminum and other goods from China, the EU and elsewhere, the retaliatory tariffs authorized in the Airbus case have the stamp of approval from the WTO, an organization that he has repeatedly criticized.

German Chancellor Angela Merkel acknowledged “we have lost a matter under WTO law.”

“This means it’s not some sort of arbitrary question, but a verdict according to international law that now weighs on Airbus, one must sadly say,” she told reporters in Berlin. “We have to see how the Americans will react now.”

The WTO in May 2018 found that EU aid for Airbus had resulted in lost sales for Boeing in the twin-aisle and very large-aircraft markets. The ruling centered on Airbus’ 350XWB – a rival of Boeing’s 787– and the doubledecker A380, which tops the Boeing 747 as the world’s largest commercial passenger plane.

Airbus and Boeing dominate the market for large airliners, and Boeing’s deliveries have plummeted this year because of the grounding of its 737 Max jet after two deadly crashes. This limits options for airlines looking to expand their fleets to accommodate increased air travel.