[Bjnews.com.cn]DIAO Daming: President Trump plans to impose $11 billion tariffs against the EU—Can it be a recurrence of the U.S.-EU trade war?

With the 2020 presidential election around the corner, Trump’s playing of trade sanctions card intends to cater to large enterprises and blue-collar workers.

On April 9, President Donald Trump said on social media that the United States will impose $11 billion tariffs on European products.

The European Union made its attitude clear on its latest response that the figure of $11 billion is overblown, the EU is awaiting the World Trade Organization to arbitrate on the level of retaliation and the EU is ready to fight back.

This signals new development of trade friction on trans-Atlantic area.

According to Trump, “The World Trade Organization finds that the European Union subsidies to Airbus has adversely impacted the United States…The EU has taken advantage of the U.S. on trade for many years. It will soon stop!” “Many years” actually dates back to the alleged “subsides war” between two airplane giants, Boeing and Airbus 15 years ago.

In 2004, the U.S. government accused Britain, France, Germany and Spain of providing illegal subsides for Airbus, who, the next year, retaliated by criticizing Boeing for accepting $20 billion subsides in the last 20 years. The two companies sought the WTO arbitration in the end.

When the WTO ruled in last May that the EU has provided unlawful subsidies to Airbus, the U.S. and the EU had been engaged on disputes over tariffs on steel and aluminum for more than two months, also, The Trump administration had not offered direct response on the arbitration yet.

While two months later in last July, Jean-Claude Juncker, President of the European Commission visited the U.S. and made a joint statement with Trump to work together toward “zero tariffs, zero trade barriers and zero subsidies” trade relations. In the face of the EU’s commitment of importing more soya beans and liquid natural gas from the U.S., The White House “neglected” the WTO’s decision.

Washington’s subtle change of attitude is rather intriguing. The main reason can be that Juncker’s commitment had encountered practical difficulties later on.

It is said that the negotiation of free-trade zone is yet to start, due to doubts and procrastination from France and some other countries. This is not what Trump would like to see, especially for one who is in urgent need of accomplishments for the 2020 election. All of this may explain his new move after the previous one that put $32 billion tariffs on steel and aluminum.

Also, the WTO ruled in this March that Boeing accepted illegal subsides from the U.S. government. The arbitration seems quite impartial, whereas it can exert a huge pressure on Bowing on top of its unpresidential crisis.

Trump, at the same time, will not be a bystander, given his “Buy American and Hire American” attitude, which means the trade sanctions move is in effect meant to please major enterprises and blue-collar workers.

However, judging from the firm response of the EU, the U.S.’s move may backfire.

To respect the multi-lateral trade rule means complete compliance to it. Actions of Ignoring or exploiting it equal violation of international principles and embodiment of trade protectionism.

(The author is the Research Fellow of National Academy of Development and Strategy, Associate Professor at School of International Studies, RUC.)

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