He couldn't help it. Donald Trump, who is stepping up the escapades within three weeks of leaving the White House, has pulled out of his hat new sanctions against the European Union, in the context of the dispute between Boeing and Airbus, 15 years old.
On December 30, the Trade Representative (USTR) announced in a press release the introduction of new sanctions against the EU worth 1 billion euros in the form of tariffs. German and French products are in the USTR’s sights: aeronautical spare parts as well as wines and spirits. Products for which tariffs will increase by up to 25%.
A shortfall of one billion euros for French wines and spirits
"It is a heavy blow that is hitting French exporters today," said César Giron, president of the Federation of French Wine and Spirits Exporters (FEVS) in a statement.
While since October 2019 only bottled wines with an alcohol level of less than 14° were overtaxed, all still wines as well as wine-based eaux-de-vie, such as armagnac and cognac, will also be affected by 25% customs duties. According to the FEVS, this tariff barrier could lead to a shortfall of 1 billion euros for French wine and spirits exporters in 2021.
This new round of taxes, drawn to everyone's surprise by the Trump administration just before the New Year, extends the various retaliatory measures taken by the United States and the EU in the context of a dispute between them since 2004. Involved: the subsidies paid by several European countries to Airbus, considered as distortions of competition by the Americans, as well as the tax credits paid by the American authorities to Boeing, perceived as favoritism by the Europeans.
In 2019, the WTO ruled in favor of both sides by allowing them both to impose sanctions. What they did not deprive themselves of.
European authorities await the arrival of the Joe Biden administration to resolve this dispute
On October 19, 2019, the United States announced the imposition of taxes on 7.5 billion dollars (6.1 billion euros) of European goods and services, the heaviest sanction ever authorized by the WTO. Since then some products are subject to taxes ranging from 15% to 25%.
Tit for tat, on November 9th, 2020 the EU introduced a new tax on imported American products for an amount of 4 billion euros following the green light from the WTO as part of an other procedure relating to aviation litigation.
It is precisely in response to these European sanctions that Washington once again drew the tariff weapon. To motivate these new sanctions, the US administration argues that the method of calculating European sanctions is based on data for 2020, an inevitably atypical year which saw trade exchanges sharply decline. The EU would therefore have applied surcharges to many more products than if the calculation had been made on the basis of a year more representative of trade between the two blocs.
Particularly targeted by these new customs duties, French products, in particular wines and spirits, will bear the cost of this trade war. In a joint press release, Bruno Le Maire, French Minister of the Economy, Frank Riester, in charge of Foreign Trade, Julien Denormandie, French Minister of Agriculture, and Jean-Baptiste Djebbari, French Minister for Transport called for the withdrawal of this news sanctions. Described as "unfriendly" and "illegitimate", this American decision "unilaterally breaks the discussions that were underway between the European Union and the United States to reach an amicable solution to this 15-year-old dispute" underlined the four ministers.
The French government also plans to "start discussions with the new American administration as soon as possible" to find a solution to this dispute. The announcement of the USTR indeed came within three weeks of the inauguration of Joe Biden, which should take place on January 20. The new president of the United States will find a nice present left by his predecessor upon his arrival to the White House.
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