Cheese, wine, olives and many other European goods are now subject to fresh US tariffs in a row over EU subsidies to Airbus. As Brussels threatens retaliation, Germany urges progress in talks for a US-EU trade deal.
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German Finance Minister Olaf Scholz on Friday warned his European Union counterparts against further escalating tensions with the United States after the country began imposing a range of punitive tariffs on European goods.
Washington introduced the measures in response to EU subsidies for European aircraft maker Airbus. The plan will see duties of 10% on Airbus planes and 25% for agricultural products like French wine, Italian cheese, and Scottish whisky.
Trade agreement to defuse tensions
Speaking in Washington, where he is attending the IMF/World Bank annual meetings, Scholz noted that EU officials were working intensively behind the scenes to hammer out a trade agreement with Washington to avert the threatened tariffs.
The German minister's position contradicted that of EU Trade Commissioner Cecilia Malmstrom who warned that the US tariffs would leave the bloc with "no alternative" but to impose its own countermeasures.
The World Trade Organization (WTO) greenlighted the US tariff move Monday, which seeks to recoup damages of $7.5 billion (€6.7 billion).
US President Donald Trump has repeatedly boasted that the tariffs he has imposed on trading partners are a financial windfall but, research shows it is Americans who bear the brunt of the impact. DW has an overview.
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Solar panels and washing machines
The first round of tariffs in 2018 were on all imported washing machines and solar panels — not just those from China. A study by economists from the Federal Reserve Bank of
New York, Columbia University, and Princeton University found that the burden of Trump's tariffs — including taxes on steel, aluminum, solar panels falls entirely on US consumers and businesses who buy imported products.
On Friday May 10, 2019 President Donald Trump imposed sanctions on $200 billion (€178 billion) worth of Chinese goods. The move raised tariffs from 10% to 25% on a range of consumer products, including cell phones, computers and toys. China's Commerce Ministry said it "deeply regrets" the US decision.
Image: Getty Images/AFP/STR
Issues with the EU
In April 2019, the United States said it wanted to put tariffs on $11.2 billion worth of goods from the EU. The list includes helicopters and aircraft from Airbus as well as European exports like famous cheeses such as Stilton, Roquefort and Gouda, wines and oysters, ceramics, knives and pajamas.
Image: Imago/Ralph Peters
EU fights back
The EU imposed import duties of 25% on a $2.8 billion range of imports from the United States in retaliation for US tariffs on European steel and aluminum. Targeted US products include Harley-Davidson motorcycles, bourbon, peanuts, blue jeans, steel and aluminum.
Image: Getty Images/AFP/M. Ralston
European automakers next?
May 17, 2019 is the deadline for President Trump to decide on imposing tariffs on vehicle imports from the EU. According to diplomats, Germany, whose exports of cars and parts to the United States are more than half the EU total, wants to press ahead with talks to ward off tariffs on automakers Volkswagen, Mercedes and BMW.
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India not exempt
India, the world's biggest buyer of US almonds, on June 21, 2018 raised import duties on the nuts by 20% and increased tariffs on a range of other farm products and US iron and steel, in retaliation for US tariffs on Indian steel. Trump said last month that he would end preferential trade treatment for India, which would result in US tariffs on up to $5.6 billion of imports from India.
Image: Getty Images/AFP/R. Schmidt
North American neighbors in tariff spat
Mexico on June 5, 2018 imposed tariffs of up to 25% on American steel, pork, cheese, apples, potatoes and bourbon, in retaliation for US tariffs on Mexican metals. While to the north, Canada on July 1 imposed tariffs on $12.6 billion worth of U.S. goods, including steel, aluminum, coffee, ketchup and bourbon whiskey in retaliation for US tariffs on Canadian steel and aluminum.
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The WTO sided with the US that Airbus received billions of dollars in illegal subsidies, giving the aircraft producer an unfair advantage over American competitor Boeing. Airbus-producing countries Britain, France, German, and Spain will be subject to more tariffs than other EU member states.
European regional specialties will be particularly affected by the new taxes. Goods with "protected name status", like Scotch whisky and Parmesan cheese, require a specific production method and geographical provenance to be sold under that name. Such products fetch higher prices and are protected against competition. The new tariffs will give a boost to American copycat products.
A culinary journey through Emilia-Romagna
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European producers feel they are being unfairly targeted in a political spat that has nothing to do with them, and US retailers and importers of European specialty products will also feel the pain.
Products like machines, which are more valuable to the US economy, have been largely excluded from the move. This allows Washington to apply pressure on the EU while avoiding undue harm back home.
Global repercussions
International trade tensions have plagued the global economy in the last 12 months. Chinese economic growth has sunk to a near 30-year low as the world's second-largest economy suffers through its own trade war with the US.
In annual meetings on Friday and Saturday, leaders of the WTO and its sister organization the World Bank will discuss how to defuse trade tensions that have contributed to a synchronized slowdown in trade that has affected 90% of the globe.
