On Monday (and with a Tuesday tweet for good measure), the Trump administration proposed more tariffs — this time on $11 billion worth of goods from the European Union. The reason? EU subsidies for airline manufacturer Airbus.
There could be some merit to lashing out at EU support for Airbus. But the U.S. has plenty of its own subsidies and anti-competitive buddy-buddy relations between the government and U.S. manufacturers like Boeing. The World Trade Organization has ruled that the U.S. too had provided billions in subsidies as well. It determined in March that the U.S. had failed to remove some of those subsidies. Moreover, the EU is still waiting on a determination from the trade body as to its right to retaliate against the U.S.
Even worse for Boeing, after two of its new 737 MAX jets crashed in five months, killing more than 300 people, all of the unflattering details about company ties to regulators, lack of government oversight and a rush to prematurely roll out the plane are all going to continue to face a good deal of public attention.
That means that, far from pushing the European Union the cut some of its billions in subsidies to Airbus, new tariffs from the Trump administration will look like an attempt to prop up a disgraced U.S. company. Even worse, since the U.S. initially hesitated in grounding the Boeing 737 MAX planes in the wake of the crash in Ethiopia, countries around the world are already wary of the integrity of U.S. regulators and their industry ties.
The wedge between the U.S. and the EU is already widening, pushing Brussels away from Washington and closer to Beijing. Indeed, European leaders and their Chinese counterparts are already set to meet this week on trade – a burgeoning partnership itself brought on in part by Trump’s existing trade policies.
If the U.S. is serious about promoting free trade and competition, Washington would do well to look in the mirror. So far, Trump’s approach to trade negotiations has been part protectionist, part unpredictable. That already leaves the EU with plenty of reason to look for partnerships elsewhere. The latest tariff threat is just another shove in that direction.
