The EU Is Allowed To Take Countermeasures Against Us Goods And Services

The World Trade Organization (WTO) has once again put a stop to the endless dispute over subsidies in the aviation manufacturing industry between the United States and Europe: the European Union's appeal has been approved, and it can take countermeasures against nearly US $4 billion of US goods and services every year. For the European Union, one year after the United States formally imposed tariffs on it, the WTO ruling is of great significance. Although the amount is lower than the original demand, it also conveys to the United States that it will never wait to die.

After two weeks of market news fermenting, the WTO finally released the official ruling results. On the 13th of local time, trade officials in Geneva said that due to the failure of the United States to comply with the WTO ruling on the US government subsidizing Boeing company, the EU can take countermeasures against us goods and services up to US $3.99 billion each year. The amount is equivalent to the losses suffered by the EU caused by the tax reduction and subsidy of Washington state to Boeing company from September 2012 to September 2015, including Airbus's three major sales losses and other negative effects.

As the world's two major aircraft manufacturing giants, Boeing and Airbus respectively occupy an unshakable position in the industry of the United States and the European Union, and the protection of both sides for Boeing and Airbus has also opened an endless dispute.

On October 6, 2004, the United States filed a lawsuit against WTO, accusing the EU of providing illegal subsidies to Airbus in various forms. Subsequently, the EU also took the same measures to sue the US government for providing illegal subsidies to Boeing. After that, accusations and rulings continued.

The results of the latest round of prosecutions were included. In October 2019, under the ruling of the WTO, the United States formally imposed tariffs on US $7.5 billion of EU exports to the United States. In February this year, the tariff on EU large civil aircraft was raised from 10% to 15%.

Not to be outdone, the European Union demanded in July this year that the United States immediately lift its decision to impose tariffs on Airbus. At that time, EU Trade Commissioner Phil Hogan said that the WTO would soon make a ruling on the EU's prosecution of Boeing's illegal subsidies. If the United States is not willing to reach a settlement with the EU, the EU will reserve the right to take sanctions against the United States.

Now, the European Union is finally back. Although U.S. trade representative lethizer said in a news release that the tax cuts in Washington state had been withdrawn earlier this year, the EU has no "effective basis" for retaliation against us products. However, WTO arbitrators stressed that the United States did provide illegal subsidies to Boeing through this tax reduction policy, which was not conducive to the sale of Airbus commercial aircraft.

It is worth noting that nearly $4 billion is discounted against the EU's requirements. The European Union had previously requested a limit of about 8.58 billion US dollars per year for countermeasures, while the United States said it should not exceed 411.8 million US dollars. According to the WTO ruling, the EU can now request the WTO dispute settlement mechanism to authorize it to take countermeasures against the United States, the amount of which shall be subject to this ruling, and it will take effect once it is authorized.

However, the EU does not seem to be ready to fight back immediately. EU Trade Commissioner Dong brofskis said on social media that he would re engage with the United States, "what we want most is a negotiated settlement. Otherwise, we will be forced to defend our interests and respond in an appropriate way. ".

Of course, this may not be simple. Lethizer has rejected all EU solutions, stressing that the US side's demands are: first, the EU promises to end its subsidies to Airbus; second, monetary compensation.

What makes the situation more serious is the impact of the epidemic, which has brought unprecedented impact to the aviation industry. Governments of all countries are stepping up subsidies. Boeing, for example, delivered 28 commercial aircraft in the third quarter, down 55% from 62 in the same period in 2019, according to data released on the 13th.

At the same time, the current situation in the EU is still waiting. Three officials familiar with the EU's thinking say the EU is likely to wait until the US election is over in three weeks. It is understood that the European Union has drafted a tariff list of us products. Although the above-mentioned target may not be aimed at the U.S. military products, including the U.S. President trump and its allies, may not be targeted at the U.S. military products, including the U.S. President trump and his allies until March.

After all, Democratic presidential candidate Joe Biden is much more friendly to the EU than trump, whose chief foreign policy adviser, Anthony brinkin, has said that if Biden wins the presidential election in November, Trump's "man-made trade war" against the EU will be ended.

Sun Chenghao, a scholar at the American Institute of the Chinese Academy of modern international relations, points out that trump has always advocated that the United States should give priority to the United States in a more radical way. In contrast, the Biden team has actually released a lot of information that is beneficial to Europe. For example, on issues such as the Iran nuclear agreement and who, its understanding of Europe is more consistent, which was reported not long ago Biden started to talk to the British team.

"If Biden is elected, at least there will be more room for dialogue between Europe and the United States. Of course, they will insist on their own demands. However, Biden team may not use tariff to pressure as trump does, but will adopt softer methods such as negotiation." Sun Chenghao said.