In a move that threatens to ignite a transatlantic trade war the US is set to impose tariffs on 6.8 billion euros of EU goods.
Donald Trump called it ‘a nice victory’ on Twitter, saying the ‘European Union has for many years treated the USA very badly on trade due to tariffs, trade barriers, and more.’
But that is just the first half of the WTO verdict. The Geneva-based organisation had already found that both Airbus and Boeing received billions of dollars of illegal subsidies.
The European Union is expected to win permission to impose its own tariffs when its parallel case catches up in 2020.
The outgoing EU Trade Commissioner made a statement, saying: “The mutual imposition of countermeasures, however, would only inflict damage on businesses and citizens on both sides of the Atlantic, and harm global trade and the broader aviation industry at a sensitive time.”
How significant this harm will be?
According to the Italian cheesemaking consortium, US consumers will pay around $5 a kilogramme more for Italian Parmesan because of duties.
US tariffs will hit around 500 million euros of Italian agricultural products per year, around 1 billion euros of Spanish goods and put at risk over 1 billion euros of whiskey exports from Scotland to the US – the largest and most valuable single market for Scotch whiskey.
Britain is now seeking confirmation from the World Trade Organisation that it had complied fully with its rulings and should not be facing tariffs.
But so many questions remain: will it get the exemption? If not, will British products be taxed during less than two weeks? They new tariffs come into force on the 18th of October, 13 days before Britain is due to leave the EU.