Airbus: Tariffs on EU planes will harm US airlines
February 15, 2020
Washington's decision to raise tariffs on European planes will cost US consumers, Airbus has said. The increase in duties on planes built in Europe came after President Trump promised serious talks over a trade deal.
Image: picture-alliance/dpa/MAXPPP/S. Lapeyrere
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The White House on Friday raised tariffs on aircraft imported from the European Union, prompting Airbus to suggest there will be a knock-on effect that will hit US airlines already facing a shortage of planes.
The European planemaker also said that it would maintain communication with its US customers to "mitigate effects of tariffs insofar as possible" and hoped the Office of the US Trade Representative (USTR) would soften its stance. Airbus also said that it would be US citizens who end up bearing the brunt of the tariff increase.
"USTR's decision ignores the many submissions made by US airlines, highlighting the fact that they — and the US flying public — ultimately have to pay these tariffs," the European multinational aerospace corporation said in a statement.
No end in sight to trade disputes
Earlier on Friday, Washington announced it would raise tariffs on aircraft imported from the EU to 15%, from the previous figure of 10%, ratcheting up pressure on the EU to resolve a dispute that has been ongoing for 16 years over support for airplane makers, and raising the stakes in broader talks to reach a US-EU trade deal. The new figure of 15% will take effect from March 18.
The levy declaration from the White House came just days after President Donald Trump said it was time to talk "very seriously" about a trade deal with Brussels.
The US said it could reconsider the tariff hike if the EU imposed additional tariffs on US imports in connection with the aircraft subsidy disputes.
Trade, tariffs and toilet brushes — 2019's top business stories
The US-China trade war reached a crescendo, a revised Brexit deal was signed, Boeing's 737 Max jets were grounded and Saudi Aramco launched the biggest ever IPO. DW recalls the top business stories of 2019.
Image: Getty Images/AFP/STR
Busted flush?
The US president's voracious social media activity moved the markets and even provoked the Federal Reserve. Trump put pressure on the US central bank to lower interest rates to prevent a slowing economy just as he seeks reelection next year. China, another victim of Trump's ire due to the ongoing trade war, retaliated with billions in tariffs. In other news, this toilet brush became a bestseller.
Image: Getty Images/AFP/STR
Tariffs delayed, no trade deal yet
Two years of trade tensions have seen the US and China levy tariffs on over $450 billion worth of each other's exports. Despite his harsh rhetoric, Trump delayed an increase in the tariff amount on some products and put off plans to penalize a further $156 billion worth of Chinese goods citing progress over a bilateral trade deal. In December, the two sides inked the first phase of the agreement.
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Huawei finished?
The Huawei blockade continued to be a major sideshow of the trade war. Amid concerns of possible Chinese espionage, Trump temporarily banned US firms from doing business with the telecoms giant. The debate spilled over to Germany where Chancellor Angela Merkel faced pressure to exclude the Chinese firm from bidding to build the country's 5G network. Despite this Huawei won one of the contracts.
IPO investors demand profits
2019 was the year investors pushed back on IPOs with over-hyped valuations. Ride-hailing app Uber hit the market in May with a valuation of $75.5 billion. It has since lost a third of its value due to concerns that the firm is burning too much money and not growing revenue fast enough. Shared workspace startup WeWork canceled its listing in September as investors questioned its business model.
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Tesla picks Germany
Tesla's decision to build its first European electric car and battery factory near Berlin was widely cheered in Germany. The €4 billion Gigafactory will bring thousands of jobs to the eastern state of Brandenburg and is also seen as a "gloves off" message to German automakers that have been late in committing to the new era of electromobility.
Image: Getty Images/S. Gallup
New deal, new Brexit delay
British Prime Minister Boris Johnson hailed a revised EU divorce deal in October. Just like the previous Brexit agreement, which failed a parliamentary vote three times, his new plan was voted down on the first attempt. To break the paralysis, Johnson called a snap election, which he won with a landslide. Brexit is therefore back on, with the UK set to depart the EU at the end of January.
Image: Reuters/F. Lenoir
Boeing's 737 Max in trouble
After two fatal crashes in five months, Boeing in March grounded its 737 Max jetliner worldwide after investigators questioned the role of the aircraft's MCAS anti-stall system. Several pilots had complained about difficulties in controlling the aircraft during takeoff. With 371 of the 2-year-old planes already in operation, the grounding impacted the profitability of dozens of airlines.
Image: AFP/Getty Images/M. Ralston
Overhaul at Deutsche Bank
In July, Germany's biggest lender, Deutsche Bank, announced a radical restructuring including the loss of 18,000 jobs globally and the creation of a bad bank to offload toxic assets. The firm, which has been trying for years to improve profitability, shed its equities sales and trading business. Instead, it plans to refocus on its German and European business.
Image: picture-alliance/R. Goldmann
Saudis break IPO record
The most profitable story of the year was this month's launch of Saudi Aramco's IPO. The on-off sale of 1.5% of the world's biggest oil company finally went ahead but only to Saudi and regional investors. A simultaneous overseas listing was abandoned amid foreign investor concerns. On its first trading day, Aramco shares climbed 10% giving the oil giant a market valuation of around $1.88 trillion.
Image: picture-alliance/AP Photo/A. Nabil
Bayer's bosses in the dock
German chemicals giant Bayer faced a shareholder revolt in April over the way the company handled the acquisition of US rival Monsanto. Bayer's stock fell 30% in the six months after the takeover as it emerged that Monsanto was facing thousands of lawsuits that claimed its Roundup weedkiller caused cancer. Despite the outrage, Bayer's supervisory board kept supporting CEO Werner Baumann.
Image: picture alliance/AP Photo/M. Meissner
Sun worshippers burned
In September, 150,000 holidaymakers were left stranded when travel giant Thomas Cook went bust. The UK government launched its largest peacetime repatriation of tourists. Its German subsidiary, responsible for around 40% of the group's revenues, was also forced to file for bankruptcy to protect itself. The government stepped in to compensate German tourists after an insurance fund ran out of cash.
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Will Lagarde do whatever it takes?
After Mario Draghi's eight-year term ended in November, Christine Lagarde stepped in to head the European Central Bank. The former IMF chief has yet to disclose much about her plans for eurozone monetary policy but has already called for countries using the single currency to boost public spending and investment to arrest a potential downturn next year.
