AOn January 16, US President Donald Trump is due to leave the White House and hand over official duties to his successor, Joe Biden.
However, the incumbent government insisted on giving Europe a poisoned farewell gift: On January 12, a good week before the change of office, new punitive tariffs against EU companies will come into force.
The new levies, announced shortly before the turn of the year, are aimed primarily at German and French producers of wine and spirits. The penalty tax of 25 percent should apply to wines from Germany and France with more than 14 percent alcohol. Cognac is also included, for example.
The tariffs are only the latest chapter in the long-standing dispute over subsidies for the rival aircraft manufacturers Airbus and Boeing.
The WTO has agreed with both the US and the EU
The US has complained to the World Trade Organization about illegal subsidies for the European manufacturer Airbus and the EU about illegal government support for the US company Boeing.
The WTO has agreed that both sides are right, ruling that the European and American subsidies violate WTO rules and allow both sides to impose punitive tariffs on each other.
The US government had already imposed its tariffs at the end of 2019, but is now stepping up with the new taxes. It had not yet exhausted the quota allowed by the WTO.
The EU criticizes the new levies, but is preparing for the fact that the additional levies, which are a heavy burden for some companies, will only be short-lived.
Brussels and Washington will resolve the dispute over subsidies for aircraft manufacturers by the end of the year – that is the expectation in Europe’s capital.
In the past few weeks, after the Europeans had also imposed tariffs on US exports worth four billion euros at the beginning of November, talks between Brussels and Washington picked up speed.
Trump urgently needs a success at the end
On the US side, there was apparently the will to conclude the talks before the change of government, according to EU circles.
The US trade representative Robert Lighthizer apparently wanted to make an agreement his legacy. Trump, too, could have sold the deal as a success in his trade policy.
Such a success is urgently needed, because Trump’s strategy of trade wars and punitive tariffs has crashed: The outgoing president clearly missed the election promise to reduce the US trade deficit with other states. In November, the deficit was $ 68.1 billion, the largest since August 2006.
Brussels has high hopes for the upcoming US President Joe Biden and an end to Trump’s difficult to predict political style. “The EU has always called for a negotiated solution in the Airbus-Boeing dispute,” said Valdis Dombrovskis, Vice President of the EU Commission responsible for trade, to WELT. “We only raised our tariffs when the US had given us no other choice.”
The powerful politician makes an offer to Joe Biden and his team: “We are hopeful that the new US administration will be more cooperative and we stand ready to resolve this dispute. We are very keen to put the trade disputes between the EU and the US behind us and to concentrate again on tackling global challenges such as the climate crisis and the WTO reform together. ”A solution to the trade dispute unless part of a new transatlantic one Agenda.
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“I am very optimistic that there will be an agreement with the new US government this year,” says Bernd Lange (SPD), chairman of the trade committee in the European Parliament.
For an agreement on strictly regulated state support for aircraft manufacturers, however, the EU must also act unanimously. Apparently, however, the French government, which does not want to completely forego subsidy policies, is blocking. “The French idea of funding national industrial champions collides with the idea that both sides should refrain from subsidizing their industries,” says Lange.
The hope that everything will get better soon seems justified. “Biden should settle the artificial trade war with Europe,” said Antony Blinken, the future US Secretary of State, recently at a panel discussion at the American Chamber of Commerce.
Most powerful aircraft manufacturer
The new president sees Brussels as an ally, not as an opponent like Trump – in fact, the Republican once called Europe an “enemy” in the middle of his term in office. Blinken himself, who spent part of his childhood in Paris and speaks perfect French, is also considered a transatlantic.
“The EU is the largest market in the world,” said Blinken, “that’s why Biden will try to mend economic relations.” But the Democrat will also be tough in one area: agriculture. “There is an imbalance,” said Blinken. “Certain rules make it difficult for America to export agricultural products to Europe.” That must change.
Other personnel decisions in Biden also suggest that the tone is becoming more conciliatory. Katherine Tai will take the place of the previous trade representative Robert Lighthizer. Worlds seem to lie between the two.
Lighthizer is considered a macho with a big ego, he is said to have hung a life-size picture of himself at home. And like Trump, he sees America as the victim of a global economic raid. Other states, says Lighthizer, plundered the United States.
Tai, previously a trade expert on the powerful budget committee of the US House of Representatives, is more cautious.
Democrats and Republicans alike see her as a skilled negotiator. A woman who manages to find compromises behind the scenes. When the two parties argued over the USMCA trade agreement between the United States, Canada, and Mexico in 2019, Tai is said to have reached an agreement quietly and efficiently.
Ross once helped Trump introduce tariffs on steel and aluminum
The successor to US Secretary of Commerce Wilbur Ross is also considered moderate. It was announced Thursday that Biden has selected Rhode Island Governor Gina Raimondo for the post.
Ross once helped Trump introduce tariffs on steel and aluminum. He developed the notorious argument that the import of the metals threatened the national security of the United States – which met with worldwide criticism.
Something like that is not to be expected from Raimondo. The economist claims to be an advocate of free trade and in the past did not attract attention for her radical ideas. Their most controversial project to date: a slight cut in pensions for the citizens of Rhode Island.