US-EU trade confrontation likely to turn into full-blown trade war

US-EU trade confrontation likely to turn into full-blown trade war

Given the number of disagreements between the US and the EU, some experts are sure that investors should brace for another large-scale trade war. Besides, the conflict escalates every time when the parties slap new tariffs on each other. However, soon the conflict may enter a new phase as the European Union is seeking permission from the WTO to impose new tariffs worth $ 11.2 billion on US goods. The apple of discord remains the same: the dispute over aircraft subsidies. Notably, the conflict has been lasting for several years.

The United States is blaming some EU countries for providing massive subsidies to Airbus that have seriously injured the US aerospace industry. As a result, Boeing, US aircraft giant, has faced unfair competition. Remarkably, the WTO has agreed that the United States is entitled to impose countermeasures in response to the EU’s illegal subsidies. Therefore, the US increased tariffs on imports of a number of European goods totaling $7.5 billion. The EU authorities retaliated with a counter case, alleging that Boeing received illegal subsidies from the US government that gave the aircraft manufacturer "a competitive advantage in the international arena". Curiously enough, the European Union confirmed the WTO appeal ruling had vindicated its claims that Boeing also received illegal subsidies

It is difficult to say how this confrontation will end and whether it will turn into a full-blown trade war. This is not the first time the EU authorities have resorted to such measures. In 2018, the EU imposed tariffs on US metallurgical, agricultural, and other goods after Washington introduced tariffs of 25% on steel and 10% on aluminum imports.


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