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AOn January 16, the President of the United States, Donald Trump, will move out of the White House and hand over official business to his successor Joe Biden.
However, the sitting government insisted on giving Europe a poisoned parting gift: on January 12, a good week before the change of office, new punitive tariffs will take effect against EU companies.
The new taxes, announced shortly before the turn of the year, are aimed primarily at German and French wine and spirits producers. The 25 percent penalty rate should apply to German and French wines with more than 14 percent alcohol. Cognac is also included, for example.
The tariffs are just the latest chapter in the long-running dispute over subsidies for competing jet makers Airbus and Boeing.
The WTO has agreed with both the US and the EU
The United States has complained to the World Trade Organization for illegal subsidies to the European manufacturer Airbus and the EU for illegal state support for the US company Boeing.
The WTO has agreed that both parties are right, ruling that European and US subsidies violate WTO rules and allow both parties to impose punitive tariffs on each other.
The US government had already imposed its tariffs at the end of 2019, but is now increasing them with the new taxes. It had not yet exhausted the quota allowed by the WTO.
The EU criticizes the new taxes, but is preparing for the fact that the additional taxes, which are a heavy burden for some companies, will be short-lived.
Brussels and Washington will resolve the dispute over subsidies to aircraft manufacturers at the end of the year, that is the expectation in the European capital.
In recent weeks, after Europeans also imposed tariffs on US exports worth four billion euros in early November, talks between Brussels and Washington accelerated.
Trump badly needs a hit in the end
On the US side, there was apparently a willingness to conclude the talks before the change of government, according to EU circles.
The United States Trade Representative, Robert Lighthizer, apparently wanted to make a deal his legacy. Trump could also have sold the deal as a success in his trade policy.
That success is urgently needed, because Trump’s strategy of trade wars and punitive tariffs failed: The outgoing president clearly failed to deliver on an electoral promise to reduce America’s trade deficit with other countries. In November, the deficit was $ 68.1 billion, the largest since August 2006.
Brussels has high hopes for the next US president, Joe Biden, and the end of Trump’s hard-to-predict political style. “The EU has always called for a negotiated solution to the Airbus-Boeing dispute,” Valdis Dombrovskis, vice president of the European Commission responsible for trade, told WELT. “We only increased our tariffs when the United States had given us no other option.”
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 are ready to resolve this dispute. We are very interested in putting the trade disputes between the EU and the US behind and refocusing on tackling global challenges like the climate crisis and WTO reform together. ” A solution to the trade dispute unless it is part of a new transatlantic Agenda dispute.
“I am very optimistic that there will still be an agreement with the new US government this year,” says Bernd Lange (SPD), chairman of the European Parliament’s trade committee.
However, for an agreement on strictly regulated state support for aircraft manufacturers, the EU must also act unanimously. However, apparently the French government, which does not want to renounce the subsidy policy completely, is blocking. “The French idea of financing national industrial champions collides with the idea that both parties should refrain from subsidizing their industries,” says Lange.
The hope that everything will improve soon seems justified. “Biden should solve the artificial trade war with Europe,” Antony Blinken, the future US Secretary of State, said recently in a panel discussion at the US Chamber of Commerce.
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. Blinken himself, who spent part of his childhood in Paris and speaks perfect French, is also considered an ocean liner.
“The EU is the biggest market in the world,” Blinken said, “that’s why Biden will try to mend economic relations.” However, in one area, the Democrat will be tough: agriculture. “There is an imbalance,” Blinken said. “Certain rules make it difficult for the United States to export agricultural products to Europe.” That must change.
Other Biden personnel decisions also suggest that the tone is becoming more conciliatory. Katherine Tai takes the place of former business representative Robert Lighthizer. The worlds seem to be between the two.
Lighthizer is considered a male with a big ego, it is said that he posted a life-size photo of himself at home. And like Trump, he sees the United States as the victim of a global economic heist. Other states, Lighthizer says, looted the United States.
Tai, a former trade expert on the powerful budget committee of the US House of Representatives, seems more cautious.
Both Democrats and Republicans see her as a skilled negotiator. A woman who manages to find commitments behind the scenes. When the two sides discussed the USMCA trade agreement between the United States, Canada, and Mexico in 2019, Tai is said to have quietly and efficiently reached an agreement.
Ross once helped Trump introduce tariffs on steel and aluminum
The successor to the US Secretary of Commerce, Wilbur Ross, also considers himself a moderate. On Thursday, it was revealed that Biden chose Rhode Island Governor Gina Raimondo to the position.
Ross once helped Trump introduce tariffs on steel and aluminum. He developed the notorious argument that the importation of metals threatened the national security of the United States, which was the subject of criticism around the world.
Something like this is not to be expected from Raimondo. The economist claims to be an advocate for free trade and has been unremarkable in the past for her radical ideas. His most controversial project to date: a slight cut in pensions for Rhode Islanders.
