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Trump hails 'nice victory' on trade as EU whisky, wine makers left reeling

EconomyOct 03, 2019 04:55PM ET
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© Reuters. FILE PHOTO: A bottle of whisky is left on the bank as fishing starts on the opening day of the salmon fishing season on the river Tay near Meikleour, Scotland

By Kate Holton

LONDON/WASHINGTON (Reuters) - President Donald Trump hailed a "nice victory" on Thursday after the United States got the green light to place tariffs on European Union goods in a dispute over EU aircraft subsidies.

But Wednesday's decision by the World Trade Organization (WTO) left Scottish whisky makers, Spanish winemakers and French cheesemakers fuming as the U.S. tariffs targeted products from countries in the Airbus (PA:AIR) consortium.

Engineers in Germany worried that the dispute over subsidies granted to the European planemaker was leading to "a table tennis match" over trans-Atlantic tariffs, and France and Germany signaled retaliatory moves by the EU.

The WTO decision gave the United States the go-ahead to impose tariffs on $7.5 billion worth of EU goods annually in the long-running case. The global trade watchdog will hold a special meeting of its Dispute Settlement Body on Oct. 14 to formally adopt the decision.

The dispute darkens a global economic outlook that has already been dimmed by a U.S.-China trade war now in its second year. Washington and Beijing have imposed tariffs on each other's goods worth hundreds of billions of dollars.

Trump wrote on Twitter the EU "has for many years treated the USA very badly on Trade due to Tariffs, Trade Barriers, and more. This case going on for years, a nice victory!"

Washington said that, after 15 years of litigation, it would impose 10% tariffs on Airbus planes, a move that could hurt orders by U.S. airlines, and 25% duties on French wine, Scotch and Irish whiskies, and cheese from across the Continent.

The size and scope of the tariffs were reduced considerably from a $25 billion list floated by Washington this year that included helicopters, major aircraft components, seafood and luxury goods.

The U.S. Trade Representative's office said it would continually re-evaluate the tariffs based on its discussions with the EU, but could increase the tariffs "at any time, or change the products affected."

White House trader adviser Peter Navarro, speaking with Fox Business Network on Thursday, warned Europe against retaliatory measures since the U.S. tariffs were approved by the WTO.

"There's going to be no tit-for-tat retaliation," Navarro said. "Under the rules of the WTO, which we're complying with here, we get to do this and they should not do anything back."

But French Finance Minister Bruno Le Maire said preparations were under way in Europe to react with sanctions.

"If the American administration rejects the hand that has been held out by France and the European Union, we are preparing ourselves to react with sanctions," he said. .

His German counterpart, Olaf Scholz, told the mass-circulation Bild newspaper the past few months had shown that trade conflicts helped no one, adding, "Therefore we will react to the new situation in a determined but considered way."

Britain said it was seeking confirmation from the WTO that it had complied with the organization's rulings and should not face tariffs. U.S. tariffs on European goods have plunged the UK into a trade war between the United States and the EU just as it plans to leave the 28-nation bloc.

The Scottish Whisky Association said jobs and investment were at risk from a 25% tariff on single malt. Scotch whisky exports to the United States, the industry's biggest single market, were worth 1 billion pounds ($1.23 billion) last year.

"Despite the fact that this dispute is about aircraft subsidies, our sector has been hit hard," the association's chief executive, Karen Betts, said in a statement, urging restraint from both sides.

TARIFF TABLE TENNIS

Spanish vintners said their wine would cost too much in U.S. stores if tariffs were confirmed.

"The tariffs will affect our competitivity," said a spokesman for CECRV, the association for producers of Spanish wines such as Rioja and Cava.

Germany's VDMA engineering association said it was disappointed the European Commission, the EU executive, had not defused the row. "The current situation resembles a table tennis match," said VDMA trade expert Ulrich Ackermann.

Spanish olives, British sweaters and woolens, and German tools and coffee were targeted in addition to British whisky and French wine.

Cheese from nearly every EU country will also be hit with the 25% tariffs, but Italian wine and olive oil were spared, along with European chocolate.

"Dairy products are going to be directly hit ... we are going to fight for these measures to be delayed," said Michel Nalet, spokesman for France's Lactalis group, the world's biggest dairy firm, which makes butter and cheeses under the President label.

The U.S.-based Cheese Importers Association of America said it would challenge a decision by the U.S. Trade Representative's office to skip offering a grace period for goods that were already in transit when the tariffs took effect.

There was relief for some who had expected to be drawn into the row but were not.

Shares in European luxury goods, including British fashion brand Burberry (L:BRBY), and drinks companies, such as France's Remy Cointreau (PA:RCOP), rose on Thursday, after the tariffs excluded cognac, champagne and leather goods.

One person familiar with the case said the U.S. Trade Representative was deliberately not using the full extent of WTO-approved ruling to coax the EU into negotiations.

Airbus and U.S. firm Boeing Co (N:BA), the world's two largest planemakers, have waged a war of attrition over subsidies at the WTO since 2004. The dispute has tested the trade policeman's influence and is expected to set the tone for competition from would-be rivals from China.

Trump hails 'nice victory' on trade as EU whisky, wine makers left reeling
 

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Buzzy Jefferson
Buzzy Jefferson Oct 04, 2019 4:48PM ET
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It wouldn't hurt the average scotch drinker to cut down a bit anyway. It's really bad for their livers.
Ludovic Raymond
Ludovic Raymond Oct 03, 2019 7:44PM ET
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No vision, no end in sight, hypocrisy and a lit of nonsense
Ludovic Raymond
Ludovic Raymond Oct 03, 2019 7:43PM ET
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No long term vision, pure hypocrisy (the US government is helping American farmers and other industries), more nonsense and stupidity
Bade Sahib
Bade Sahib Oct 03, 2019 10:44AM ET
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I am at Bev Mo hoarding Scotch
Bade Sahib
Bade Sahib Oct 03, 2019 10:43AM ET
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The Frenchies need to be told who is the Boss
Ng Zen ng
Ng Zen ng Oct 03, 2019 10:25AM ET
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Well done !
Jack Sokol
Jack Sokol Oct 03, 2019 10:23AM ET
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25% tariff gouge on Single malt Scotch!? Ouch!
Bade Sahib
Bade Sahib Oct 03, 2019 10:23AM ET
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Time to take a trip to BevMo
Al Vlaj
alvlaj Oct 03, 2019 9:29AM ET
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Like the US doesnt subsidize Boeing?
Al Vlaj
alvlaj Oct 03, 2019 9:28AM ET
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Victory, huh? And your prize? A recession and farmers losing their farms. Oh. Oh, he means the vicotry for the short he put on in his personal account...
Me comment
Me comment Oct 03, 2019 9:28AM ET
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And Trump losing the election
Brad Dover
Brad Dover Oct 03, 2019 9:26AM ET
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I can't afford trump's tariffs...and this will only intensify the trade wars
Me comment
Me comment Oct 03, 2019 9:16AM ET
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Trumps got it wrong again, when are tariffs ever a victory for anyone, never ever.
Bade Sahib
Bade Sahib Oct 03, 2019 9:15AM ET
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Scotland join the UK in the Brexit deal and save your scotch from taxes
Buzzy Jefferson
Buzzy Jefferson Oct 03, 2019 9:15AM ET
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Scotland would be better off if they did.
Bade Sahib
Bade Sahib Oct 03, 2019 9:14AM ET
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Louis Vutin bags are exempt but regular scotch is targeted .How silly
Me comment
Me comment Oct 03, 2019 9:14AM ET
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His wife and daughters and daughter-in-laws use the bag so doesn't want to cost his family.
Thomas Snell
Thomas Snell Oct 03, 2019 9:14AM ET
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...and Scotch is targeted but not cognac and champagne? Rich people never sacrifice, ever. They might grow some bone spurs.
Benjamin McIntire
Benjamin McIntire Oct 03, 2019 8:39AM ET
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This is gonna shock a lot of Republican winos and boozers! Trump should be wary of hitting folks where they will feel it acutely.
Keith Wilson
Keith Wilson Oct 03, 2019 8:39AM ET
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Much rather be a wino and boozer than a narcissistic group of liars and hypocrites which is the Democratic party
Thomas Snell
Thomas Snell Oct 03, 2019 8:39AM ET
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Look in the mirror much? If your Narcissist Liar-in-Chief were Pinocchio, his nose would be longer than his tie!
Chris Jackson
Chris Jackson Oct 03, 2019 8:39AM ET
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HaHaha! Good one! Can't believe Keith really said. But I guess it takes winos and boozers to believe Donald Ducks nonsense.
Mark Woollums
Mark Woollums Oct 03, 2019 8:11AM ET
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Eurozone and US need to commit to free trade agreement.
Buzzy Jefferson
Buzzy Jefferson Oct 03, 2019 8:11AM ET
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I agree. A Euro/US trade agreement with fair and reciprocal tariff schedules is all that The US has ever asked for.
Buzzy Jefferson
Buzzy Jefferson Oct 03, 2019 7:55AM ET
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EU has had 25% tariffs on American whiskey for years. What are they complaining about?
Show previous replies (2)
mighty MGTOW
mighty MGTOW Oct 03, 2019 7:55AM ET
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Seriously. Im so sick and tired of the world screwing us and riding on ohr backs. I want to gove them all the finger, tarriff them all untik they grovel back apologizing. Thank God for the President. We finally have one with a pair.
EKL Teo
EKL Teo Oct 03, 2019 7:55AM ET
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This is like a war of screwing each others...?
Che Tran
Che Tran Oct 03, 2019 7:55AM ET
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mighty MGTOWto gove? what's that? hillbilly way of saying to give?
Buzzy Jefferson
Buzzy Jefferson Oct 03, 2019 7:55AM ET
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Jeff Chevalier . I don't know where you're from "Jeff", but there is a massive difference between steel, which is critical to a nation's defense, and booze. I can see clearly why you have such a chip on your shoulder, so you're forgiven.
Buzzy Jefferson
Buzzy Jefferson Oct 03, 2019 7:55AM ET
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EKL Teo . This is actually The US, after decades of being screwed by the Europeans, doing a little screwing back at those who started it.
nick bryson
nick bryson Oct 03, 2019 7:02AM ET
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more tariffs more trade war means more volatile markets.
 
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