US Sanctions Against Europe Directly Affect US Consumers
On Friday, October 18, the United States imposed a fine of 25 percent on a range of European products. The sanctions apply, for example, to wine from France, parmesan from Italy, olive oil from Spain. Imports of aircraft in the United States are now subject to an additional duty of 10 percent. If consumers in the USA will switch to cheaper alternatives as a result, then the volume of export from the EU may decrease.
The United States announced introduction of tariffs in early October in revenge for EU subsidies for the Airbus aircraft manufacturing concern. The Arbitration of the World Trade Organization (WTO) allowed the United States to introduce tariffs of up to 100 percent on goods from the EU totaling $ 7.5 billion.
Until recently, the European Union has tried to resolve the dispute through negotiations. Brussels is now threatening the United States with retaliation, as the same WTO arbitration has sided with the EU in a similar conflict over US subsidies for the Boeing concern. Since the official WTO ruling on this dispute is expected in 2020, Brussels may impose a similar amount of duties on American goods as early as next year.
The consequences of the sanctions imposed in the USA can be well illustrated by the example of Italian parmesan. From now on, this product will be levied at $ 2.15 per kilogram in the United States. As a result, consumers in the United States will have to pay $ 45 per kilogram of parmesan. The USA is the second most important market for parmesan after France.
In 2018, the volume of trade between the US and the EU, according to the United States, amounted to about 1.3 trillion dollars. For the USA, the EU countries as a whole are the most important market.
Trade relations between the parties may worsen already in mid-November, since the US administration then is going to decide on the introduction of tariffs for cars from the European Union.
source: dw.de, cnbc.com