12 votes

US hits Scotch whisky, Italian cheese, French wine, and other European products with 25% tariffs

4 comments

  1. [3]
    Deimos
    Link
    This is a result of the US winning a $7.5 billion annual award from the World Trade Organization over subsidies to Airbus.

    This is a result of the US winning a $7.5 billion annual award from the World Trade Organization over subsidies to Airbus.

    6 votes
    1. [2]
      Omnicrola
      Link Parent
      Every time I think I have an understanding of international trade, I learn something new. I'm not really clear on this ruling though. Why is a country providing subsidies or incentives to a...

      Every time I think I have an understanding of international trade, I learn something new.

      I'm not really clear on this ruling though. Why is a country providing subsidies or incentives to a company (in this case Airbus) unfair? Doesn't the US subsidize all manner of companies all the time?

      1 vote
      1. Deimos
        Link Parent
        It's definitely very confusing, and this case has been going on for a long time. The BBC article about the ruling last May says it started in 2004. Here are a few pages that seem good that I found...
        • Exemplary

        It's definitely very confusing, and this case has been going on for a long time. The BBC article about the ruling last May says it started in 2004.

        Here are a few pages that seem good that I found while searching around a little:

        Between those, my general understanding (which might still be wrong) is that they ruled that France, Germany, Spain, and the UK effectively gave a loan of about $22 billion to Airbus at a rate that was lower than they could have otherwise gotten in the market. This cheap loan gave Airbus an advantage, and caused damage to Boeing by making it hard for them to compete. Because of this, it falls under "actionable subsidy" in the WTO SCM Agreement.

        That BBC article I linked above also mentions that the EU is separately alleging that Boeing received illegal subsidies too, but the WTO hasn't ruled on it yet (and the Boeing page includes some of their counter-arguments about it):

        And still grinding through the WTO machinery is a separate complaint the EU has filed against Boeing over allegedly illegal subsidies from Washington State, the US Department of Defense and NASA.

        So potentially we're going to end up with a ruling against Boeing as well, which I guess would allow the EU to also apply retaliatory tariffs on US goods? The whole thing is a mess.

        Edit: just found this New York Times article that talks about that in a little more depth:

        Boeing, for its part, is not out of the woods either. The same appellate body will decide in coming months whether the United States complied with a 2012 order to halt subsidies in the form of tax breaks from Washington state, where Boeing is based, for certain types of jumbo jets.

        Mr. Enders of Airbus ratcheted up his rhetoric, accusing Boeing of relying on a “Washington state corporate welfare scheme” and insisting that the latest ruling was “only half the story — the other half coming out later this year will rule strongly on Boeing’s subsidies and we’ll see then where the balance lies.”

        “The result is simple: Airbus pays back its loans, Boeing pays back nothing and continues to exploit the generosity of the U.S. taxpayer,” he said. He added, “Despite Boeing’s rhetoric, it is clear that their position today is straightforward healthy: They have half the market and a full order book, they have clearly not been damaged by Airbus repayable loans.”

        Should the upcoming ruling go against Boeing, the European Union could itself be in a position to demand retaliatory tariffs on American imports.

        7 votes
  2. stephen
    Link
    Ooof. Right in the Islays. I guess this means I gotta stock up on Powers... fuckin Trump...

    Ooof. Right in the Islays. I guess this means I gotta stock up on Powers... fuckin Trump...