Hitting back: German foreign minister signals tariffs on US goods

The European Union is likely to take retaliatory measures in response to new tariffs imposed by the United States on European goods, German Foreign Minister Heiko Maas told newspapers in remarks published on Friday.

“The European Union now will have to react and, after obtaining the approval of the World Trade Organization (WTO), probably impose punitive tariffs as well,” Maas, a member of Germany‘s co-governing Social Democrats, told the Funke newspaper group.

Maas later used the same line on Twitter, adding that “Europe is united on this question. We remain ready to negotiate common rules for subsidies in the aviation industry. We can still prevent further damage.”

The WTO this week ruled that some subsidies EU states paid to plane-maker Airbus were illegal, giving the US the right to react with tariffs on goods imported from the EU. 

Washington announced plans for new tariffs on Wednesday.

Germany’s Finance Minister Olaf Scholz, also a Social Democrat, on Thursday said Europe should react prudently as trade conflicts in a globalised world were in nobody’s interest. 

‘Lose-lose’ trade war

While the level of US tariffs amounts to less than three days’ worth of annual trade between itself and Europe, importers led by US airlines that buy Airbus jets have urged Washington to be selective when choosing industries to hit to avoid causing collateral damage to the US economy.

EU manufacturers are already facing US tariffs on steel and aluminium and a threat from US President Donald Trump to penalise EU cars and car parts. The EU has in turn retaliated.

The Trump administration has concluded tariffs were effective in bringing China to the negotiating table over trade, and in convincing Japan to open its agricultural market to US products.

Washington is unlikely to skip the opportunity to implement tariffs in the case over aircraft subsidies, according to current and former US officials.

Airbus has said this would lead to a “lose-lose” trade war, and the company has published a video stressing its contribution to the US industry through local assembly plants and 4,000 direct jobs, headlined “Together, let’s keep American aerospace great”.