The urban media, and others, are reporting this week that even as administration officials are taking public victory laps over the phase-one deal with China — and in spite of continuing criticism of that agreement — they are considering heavy tariffs on a broad range of European goods that could reach "100 Percent in some cases."
The import taxes are retaliation for excessive subsidies by the European Union to the aerospace giant Airbus.
The World Trade Organization ruled in favor of the United States this year in a dispute centering on European support for the aerospace giant Airbus that has lasted 15 years. In May, the WTO ruled that Europe's financial assistance to Airbus violated global trade rules and then in September, it effectively authorized the Trump administration to impose tariffs of up to $7.5 billion a year on European imports, pending negotiations over the removal of the subsidies.
The administration unveiled an initial list of tariffs in October. Then, this month, after Europeans suffered another setback in the dispute, administration officials said they would expand the list and increase tariffs already in place.
Last week, the United States Trade Representative (USTR) published the updated list, including a variety of items Americans buy from Europe, including dairy products such as yogurt, butter and several types of cheese; olives and olive oil; other food products; hand tools; clothing; wine and grape brandy; and Scotch and Irish whisky.
The trade representative also warned that it was considering raising tariff rates on imported items that are already subject to 25 percent tariffs as part of the Airbus dispute.
The Times report said that the administration has increasingly seized on tariffs to punish Europe. In addition to considering tariffs on German cars, the United States is mulling separate tariffs on French wine and other products as retaliation for a new tax that the administration says unfairly targets American technology companies.
This year, France passed a so-called digital service tax, which hits large companies that sell and advertise to French consumers but have not faced large tax liabilities in France. Then, the USTR recently recommended tariffs up to 100 percent on $2.4 billion of French products after declaring the tax a threat to America's national security. Some of those products, most notably French wines and cheeses, are also on the new list released on Friday.
President Trump told reporters this month that the USTR finding was justified. "They're starting to tax other people's products," he said. "So therefore we go and tax them."
The extension of tariffs on the European Union is a rare example of the administration's agreeing with the WTO. Administration officials have frequently criticized the body, which they call unfair to the United States, and they have worked to undermine its effectiveness.
The administration has blocked new appointments to a crucial panel at the organization that hears appeals in trade disputes. This week, the terms of two appointees to the panel expired, leaving the panel without sufficient membership to hear new cases. That means there will be no official resolutions of many global trade disputes for the foreseeable future.
So, we will see. The Europeans are tough negotiators and have numerous "high protection" tariffs of their own that are well supported politically. While this particular fight may have less potential influence on U.S. producers than the tariff retaliation fight with China does, it can play an enormous role in the global economy—especially as economic uncertainty is increasingly identified as a potential threat to future U.S. growth.
Thus, these fights are important and should be watched closely by U.S. producers as the details and trends emerge, Washington Insider believers.
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