President Trump confirmed on Tuesday that Washington would slap the European Union with $11 billion-worth of tariffs due to the bloc’s alleged subsidies to aerospace giant Airbus. The European aircraft maker said there was no “legal basis” for the US’ tariff plans, and warned that the bloc would consider “even greater countermeasures.”
Ahead of Trump’s announcement, the US Trade Representative released a preliminary list of goods to be taxed, with its whopping 14 pages going into great detail regarding specific goods, from “boiled claims in immediate airtight containers, the contents of which do not exceed 680 g gross weight” to “artists’ brushes, writing brushes and similar brushes for the application of cosmetics, valued o/10 cents each.”
The biggest items on the list include helicopters, aeroplanes, undercarriages and fuselages, with the caveat that they are “not for use by the Department of Defence or the US Coast Guard.” Other manufactured goods include motorcycles and bicycles and associated accessories, a variety of paper products, textiles, carpets, outerwear and knit sweaters, tiles, building stones and cement articles, ceramics, products made from iron, steel, copper, nickel, zinc and other metals, tools, knives, industrial cooking materials, lenses for cameras, binoculars, telescopic sights, and several categories of wall clocks and personal time pieces.
The list also proposes tariffs on a mouth-watering assortment of exotic foods, from swordfish, lobster, salmon, trout and crab meat, to yogurts, butters, almost two pages-worth of various cheeses, fruits, vegetables, food and cooking oils, “prepared or preserved snails,” tinned olives, jams, waters, wines, liqueurs, juices, chocolate milk drinks and nonalcoholic beer.
Once implemented, the proposed tariffs will pile onto existing US levies on European goods, including the 25% and 10% duties on imports of steel and aluminium introduced by Trump last year, which prompted the EU to impose over $3 billion in retaliatory tariffs on US goods including bourbon whiskey, Harley-Davidson motorcycles and Florida orange juice. Earlier this year, President Trump doubled down on threats to impose levies on European-made cars if a trade deal can’t be reached.
The breadth of the products featured in the US Trade Representative’s list means that the vast majority of EU countries will be affected by the restrictions in one way or another.
However, market-focused observers have indicated that Airbus, British Airways owner IAG, Rolls-Royce, British aerospace engineering and technology companies Meggitt PLC and QinetiQ, as well as the UK’s Associated British Foods and Cranswick and Ireland’s Greencore food producers have already faced a 0.4-2 percent tumble in stock prices in Tuesday trading.
Stocks of the UK-based AG Barr, Britvic, Coca Cola HBC, and Diageo drinks companies also declined, with UK fashion brands Burberry and Ted Baker and British-Dutch personal care products company Unilever facing its own drop.
According to an analysis by the Jefferies investment banking company cited by Business Insider, Italian beverage maker Campari Group, French alcoholic beverage maker Pernod Ricard, the UK’s Fever-Tree drink co, and Dutch beer brewer Heineken face revenue losses of up to 6% as a result of the new Trump tariffs.
Washington’s row with Brussels over subsidies to Airbus, a long-time competitor to US aerospace giant Boeing, dates back to 2004, when the US first appealed to the World Trade Organisation for arbitration. The WTO calculated that Airbus received some $18 billion in subsidies from EU member states between 1968 and 2006. US officials suggested that these subsidies have led to a decline in Boeing sales and lost market share across the world. Brussels countered, accusing Washington of providing Boeing with similar forms of support, including tax breaks. Brussels estimates that Washington has dumped over $5 billion in subsidies for the plane maker between 1989 and 2006.