American lovers of Scotch whisky, French wine and Italian cheese might have to dig deeper into their pockets after the Trump administration slapped tariffs on $7.5 billion of European consumer products.
Although the tariffs include a wide-range of food and clothes — such as British woolen suits and German coffee — the move is actually a retaliation for a 15-year dispute between the U.S. and the European Union over aircraft subsidies.
Washington says that its aircraft giant, Boeing, has lost billions of dollars because European countries have improperly subsidized their own global competitor, Airbus.
On Wednesday, the World Trade Organization gave the U.S. the go-ahead to impose $7.5 billion of tariffs on E.U. goods to compensate.
The president tweeted Thursday that this was a “a very nice victory!”
European leaders have called for the disagreement to be solved without fresh taxes, pointing out that a separate WTO case has ruled the U.S. made similar improper subsidies to Boeing. But the U.S. said that offer was too little, too late.
“For years, Europe has been providing massive subsidies to Airbus that have seriously injured the U.S. aerospace industry and our workers,” Trade Representative Robert Lighthizer said in a statement Wednesday.
European leaders have responded by suggesting they could fire back with their own tariffs, raising the specter of the U.S. becoming embroiled in yet another tit-for-tat trade war.
Washington and Beijing have exchanged levies on billions of dollars of goods. The U.S. announced last month that it was granting exemptions on more than 400 items imported from China, an acknowledgement, according to experts, that the conflict was hurting American consumers and businesses.
A European counterpunch on trade would be the latest disagreement between the president and his counterparts across the Atlantic.