Trump’s EU Tariffs: Not Particularly ‘Spirited,’ Despite Misdirection

President Trump

President Trump's proposed tariffs on the EU are less than substantial.

SOPA Images/LightRocket via Getty Images

President Trump responded quickly but, as the data shows, not forcefully Wednesday after the World Trade Organization ruled in the favor of the United States and Boeing in a 15-year battle with the European Union and Airbus over illegal government subsides

One thing appears clear: He does not appear to be itching to get into a trade war on another front, the first being the acrimonious and grand tariff fight with China.

The WTO decision to authorize the United States to retaliate to the tune of $7.5 billion, while the largest such penalty in WTO history, is in reality a trifling amount. It amounts to little more than 1.5% of all EU imports into the United States in 2018, which totaled $487.04 billion.

By comparison, U.S. tariffs on China have topped $250 billion and Trump has threatened to put tariffs on the whole shooting match, $500 billion. Regardless of your opinion of the China strategy, it's hard to deny that's not forceful.

The EU tariffs, on the other hand, lack bite for another reason. The White House announced that it would put just 10% tariffs on aircraft and 25% tariffs on other specified imports, effective Oct. 18.

Again, that's not particularly forceful, in light of the fact that the WTO gave the United States the latitude to implement tariffs of 100% on the $7.5 billion.

Sure, there are some high-profile imports from the European Union on the list, things like Scotch, cheese, wine and aircraft, and they attracted a great deal of the attention.

It is what magicians like to call misdirection.

A rough approximation of the total value of the commodities targeted by the tariffs comes to not much more than $12 billion. (That's not $12 billion in tariffs. That's $12 billion in value for the commodities themselves.)

In 2018, imports into the United States from the European Union of aircraft totaled $5.1 billion. Those imports, which face a potential tariff of 10%, are the largest percentage of the total that made the list and, of course, target Airbus.

Wine accounts for another $2 billion, largely affecting France and Italy. Scotch and Irish whiskey account for about the same, most of it coming from the United Kingdom, more specifically, Scotland. Cordials like brandy total slightly less then $900 million.

Interestingly enough, Trump chose not to put tariffs on vodka, gin and the like. Perhaps it is because wine and whiskey have U.S. competitors, which could conceivably benefit from price creases on the imported spirits, should they occur.

Certainly, his critics cannot suggest he was thinking of his own interests since President Trump is well-known to be a teetotaler.

The reason for the timid response?

Well, Airbus has a similar WTO ruling in its favor in the wings, and will soon have the opportunity to levy its own tariffs. In addition, many U.S. airlines are Airbus customers.

Speaking of wings, there were no tariffs placed on aircraft engines or aircraft components, either.

On this one it's clear: President Trump, if he is interested in a larger fight, is only taxiing down the runway at the moment and not yet ready for takeoff. And you can bet your boots the automotive industry, which has regularly been a subject of the president's scorn, is watching.




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President Trump responded quickly but, as the data shows, not forcefully Wednesday after the World Trade Organization ruled in the favor of the United States and Boeing in a 15-year battle with the European Union and Airbus over illegal government subsides

One thing appears clear: He does not appear to be itching to get into a trade war on another front, the first being the acrimonious and grand tariff fight with China.

The WTO decision to authorize the United States to retaliate to the tune of $7.5 billion, while the largest such penalty in WTO history, is in reality a trifling amount. It amounts to little more than 1.5% of all EU imports into the United States in 2018, which totaled $487.04 billion.

By comparison, U.S. tariffs on China have topped $250 billion and Trump has threatened to put tariffs on the whole shooting match, $500 billion. Regardless of your opinion of the China strategy, it's hard to deny that's not forceful.

The EU tariffs, on the other hand, lack bite for another reason. The White House announced that it would put just 10% tariffs on aircraft and 25% tariffs on other specified imports, effective Oct. 18.

Again, that's not particularly forceful, in light of the fact that the WTO gave the United States the latitude to implement tariffs of 100% on the $7.5 billion.

Sure, there are some high-profile imports from the European Union on the list, things like Scotch, cheese, wine and aircraft, and they attracted a great deal of the attention.

It is what magicians like to call misdirection.

A rough approximation of the total value of the commodities targeted by the tariffs comes to not much more than $12 billion. (That's not $12 billion in tariffs. That's $12 billion in value for the commodities themselves.)

In 2018, imports into the United States from the European Union of aircraft totaled $5.1 billion. Those imports, which face a potential tariff of 10%, are the largest percentage of the total that made the list and, of course, target Airbus.

Wine accounts for another $2 billion, largely affecting France and Italy. Scotch and Irish whiskey account for about the same, most of it coming from the United Kingdom, more specifically, Scotland. Cordials like brandy total slightly less then $900 million.

Interestingly enough, Trump chose not to put tariffs on vodka, gin and the like. Perhaps it is because wine and whiskey have U.S. competitors, which could conceivably benefit from price creases on the imported spirits, should they occur.

Certainly, his critics cannot suggest he was thinking of his own interests since President Trump is well-known to be a teetotaler.

The reason for the timid response?

Well, Airbus has a similar WTO ruling in its favor in the wings, and will soon have the opportunity to levy its own tariffs. In addition, many U.S. airlines are Airbus customers.

Speaking of wings, there were no tariffs placed on aircraft engines or aircraft components, either.

On this one it's clear: President Trump, if he is interested in a larger fight, is only taxiing down the runway at the moment and not yet ready for takeoff. And you can bet your boots the automotive industry, which has regularly been a subject of the president's scorn, is watching.




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