Escalating trade dispute between US and EU

The World Trade Organization (WTO) has authorised the US to impose punitive tariffs on around seven billion euros worth of EU imports per year. The arbitrators approved this as a retaliatory measure against illegal subsidies granted to European aircraft manufacturer Airbus. Following the ruling Washington announced it would impose tariffs on olives, cheese and whisky as well as aircraft. Commentators outline the potential repercussions.

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El Periódico de Catalunya (ES) /

Consumers will suffer

A trade war is now inevitable, El Periódico de Catalunya fears:

“The EU will presumably react with the same or similar resolve to that of the Trump administration, at least judging by EU Trade Commissioner Cecilia Malmström's first responses and Brussels' forecast in April regarding potential punitive tariffs on US products, such as ketchup or game consoles. This new chapter of nationalist economic policy confirms Trump's recent words: 'The future belongs to patriots, not globalists.' It is to be feared that the new trade war will develop into a chronic disease the consequences of which will affect consumers in particular.”

NRC Handelsblad (NL) /

Global recession looming

This is not good news for the global economy, warns NRC Handelsblad:

“Both the European Central Bank and the US Federal Reserve have begun to proactively support their economies once more. ... The main reason cited for this is geopolitical uncertainty caused by trade wars. This slows growth and thus inflation. Multilateral institutions such as the IMF and OECD also see economic growth slowing worldwide as a result of the uncertainties. ... And that's without factoring in the consequences of the current tariff war. ... In view of unstable economies, a swing in the direction of a global recession as a result of the trade war is not unlikely.”

Frankfurter Allgemeine Zeitung (DE) /

It's a good thing we have Airbus

The Frankfurter Allgemeine Zeitung explains why it believes the subsidies were justified:

“Without subsidies the European aircraft manufacturer Airbus would not even exist, the Americans claim. They are probably right. Whether this would be in the world's interests, however, is less clear. The airlines would then be primarily dependent on the American Boeing group, whose 737 model is currently not allowed to fly after two crashes which have prompted serious safety concerns. ... However, this raises the question of how up-to-date the rules of the World Trade Organisation still are. Its decision does nothing to improve the situation. One would wish for a WTO whose main concern is to promote competition rather than to enforce principles that aren't appropriate for specific sectors such as aviation.”