In what can only be described as the latest trade spat between the US and the world, many Airbus jets are about to get a lot more expensive for US airlines. President Trump has said that trade wars are good, and easy to win… is that the case here?
In this post:
US To Impose 10% Tariff on Airbus Jets
After getting approval from the World Trade Organization this week, the US plans to impose tariffs of up to $7.5 billion on aircraft and some other goods from the European Union. This comes after the WTO ruled on the EU’s subsidies to Airbus.
These new tariffs will kick in on October 18, 2019. While the US is authorized to have up to 100% tariffs on up to $7.5 billion of goods, they’ll be adding a 10% tariff on Airbus jets manufactured in the EU. Boeing was pushing for a 100% tariff on Airbus jets (because of course they were).
The irony in all of this is that it has been determined that both Airbus and Boeing have received “illegal government subsidies,” but the case against Airbus happened first.
As US Trade Representative Robert Lightizer said in a statement:
“For years, Europe has been providing massive subsidies to Airbus that have seriously injured the U.S. aerospace industry and our workers. Finally, after 15 years of litigation, the WTO has confirmed that the United States is entitled to impose countermeasures in response to the EU’s illegal subsidies.”
Airbus has of course encouraged the US to reconsider this decision, noting that it will harm the aircraft industry, hurt trade relations, and even damage the global economy.
Which Airbus Jets Does This Impact?
It’s worth noting that Airbus actually has some plants in the US, so it is possible for many Airbus jets to be manufactured without assembly happening in the EU:
- The A220 is assembled in both Canada and Alabama
- A320 family aircraft are assembled in Alabama
The A220 is assembled in North America
So unless I’m missing something, I think the only Airbus jets currently ordered by US airlines that could only be produced in the EU would be Delta’s A350-900s and A330-900neos.
The new tariffs will apply to the A330-900neo
What also makes this kind of silly is that Airbus plants in the US get a majority of their parts from the EU. So there are no tariffs if the parts come from the EU and are assembled in the US, but there are tariffs if the plane is assembled in the EU.
So this isn’t even a tariff on the product as such, but rather on the assembly of the product.
The Timing Of This…
Not that these tariff arguments are ever especially well timed, but this comes at the same time that Boeing is really struggling while Airbus is thriving. Not only is Boeing’s popular 737 MAX grounded globally, but Airbus has also introduced some innovative new products, like the A321XLR.
Airbus has announced the A321XLR
Bottom Line
The WTO has found evidence of “illegal” subsidies to both Airbus and Boeing, and the Airbus case has gone through first. Should some practices be changed here? Probably.
But this also seems like a lose-lose situation. You have Boeing pushing for a 100% tariff on Airbus planes. Would Boeing like a 100% tariff on their planes going to Europe? I think probably not…
I’ll be curious to see how long this lasts, and if the parties involved come to their senses here.
@Brad, Respectfully, as an Import manufacturer spending time up to my eyeballs in CBT, GSP and other International trade regs and issues, I understand the practice of dumping and the anti - dumping duties which are employed to "level the playing field" and to some degree, punish the offender For example, Chinese glassware importers (not China manufacturers) pay a 31% anti dumping duty when dealing in FOB price-points of less than (I believe) US1.00. This...
@Brad, Respectfully, as an Import manufacturer spending time up to my eyeballs in CBT, GSP and other International trade regs and issues, I understand the practice of dumping and the anti - dumping duties which are employed to "level the playing field" and to some degree, punish the offender For example, Chinese glassware importers (not China manufacturers) pay a 31% anti dumping duty when dealing in FOB price-points of less than (I believe) US1.00. This is anti-dumping fair-n-square and very effective.
The "evolved" tariffs, including this one, does not penalize Airbus or level the playing field. I hurts the US consumer buying Irish whisky, in my case Scotch, and cheese, olive oil, etc. Like the current China trade war tariffs, the Airbus/EU levee does not penalize Airbus who will sell or lease to carriers in other legitimate ways or even the EU Government(s) very much.. It just slaps a new tax on unwitting consumers of unrelated products. I wonder which innocent EU'rs will get hit when Boeing's complaint is resolved early next year.
I hope you are not one of those folks who still think "China" is paying the tariffs (!!) . and Unicorns exist. I wish both were true.
Ben,
This case has gone through the WTO which is no small hurdle and you trivialize the ruling by calling it “silly”. The basic concept is called dumping, which is to sell a product for less than it costs to produce. This is what Airbus has been effectively found guilty of through the massive governmental subsidies they receive and in the world of global trade this is plain and simple cheating. If you are going...
Ben,
This case has gone through the WTO which is no small hurdle and you trivialize the ruling by calling it “silly”. The basic concept is called dumping, which is to sell a product for less than it costs to produce. This is what Airbus has been effectively found guilty of through the massive governmental subsidies they receive and in the world of global trade this is plain and simple cheating. If you are going to opine on such a matter take the time to actually do some real research into the matter and don’t just post a simplistic trivial opinionated story.
How can EU tax boeing planes if they can't delivery any?
I just love how @The Nut Paul has unilaterally appointed herself supreme authority and sole speaker for EU business. LOL. Excuse me, I'm "banging on" too much.
@Rob - you’ve got every right to be rabidly pro American if you wish, but at least be accurate. Neither taxes nor fines can be considered cash grabs. The level of taxation most large tech companies pay (including in America) is pitiful. Look where the majority choose to keep their cash piles. That does nothing for the US as a nation, let alone anywhere else, unless you consider their societal role is to make a...
@Rob - you’ve got every right to be rabidly pro American if you wish, but at least be accurate. Neither taxes nor fines can be considered cash grabs. The level of taxation most large tech companies pay (including in America) is pitiful. Look where the majority choose to keep their cash piles. That does nothing for the US as a nation, let alone anywhere else, unless you consider their societal role is to make a fraction of 1% of the nations people even richer, inflate Californian property values and support the private jet industry.
And if you want to discuss fines then let’s look at some of the fines the US has charged EU financial corporations post 2008. Did that money get paid back to the EU? If you commit an offence (for which a fine is the punishment) then of course it’s collected in the jurisdiction in which it’s committed. No ones forcing facebook to operate in the EU, but if they do then they have to follow EU rules.
And when it comes to effective subsidies it’s hard not to laugh when the US aviation market is discussed and you fail to mention Chapter 11 protection. How much money has been blown away on that over the years.. No similar support exists for carriers in the EU.
As I say you are welcome to your view, just be cognisant of the facts and be fair.
@ Dennis
Yes, privacy and data blah blah is most certainly the pretext the EU used to justify their cash grab. And if they want to demonstrate their actions were about consumer protection and not a cash grab, they could turn the fines over to the US treasury, since that is essentially whose pocket they ultimately picked. Whiskey and French wine are on the list because Trump is trying to demonstrate that if you...
@ Dennis
Yes, privacy and data blah blah is most certainly the pretext the EU used to justify their cash grab. And if they want to demonstrate their actions were about consumer protection and not a cash grab, they could turn the fines over to the US treasury, since that is essentially whose pocket they ultimately picked. Whiskey and French wine are on the list because Trump is trying to demonstrate that if you pick America's pocket, we will pick yours right back, so don't bother in the first place and those were the only products they make enough of to make that point. Let's say we're taxing those because we care about our people and trying to protect our citizens from alcohol addiction from EU poison merchants. That's a morally equivalent pretext for our cash grab, and I'm sure some dumb people will believe it.
Current US flagged A320 order book:
AA 114
AS 31
B6 84
DL 133
Total:362
This would mean a 90 month backlog in MOB assuming the current production rate of 4/month and no addition orders... not really practical. I don’t really see this effecting short term delivery positions. Spots on the lines in MOB HAM & TLS are planned out too far in advance and the logistics pathways are too complex to just move capacity around short term.
This action is an attack on my Happy-hour!! Scotch Whisky (and Irish Whiskey as well) will be tarriffed at 25%. This means that my bottle of Scotch will cost not 25% more, but 52% (est.) more since retailers set their price based on cost vs. selling price (retail margin).
John and CC, you are right: The tariff is based on 7.5 billion of goods, not planes. USA consumers pay the tax (I mean tariff) at...
This action is an attack on my Happy-hour!! Scotch Whisky (and Irish Whiskey as well) will be tarriffed at 25%. This means that my bottle of Scotch will cost not 25% more, but 52% (est.) more since retailers set their price based on cost vs. selling price (retail margin).
John and CC, you are right: The tariff is based on 7.5 billion of goods, not planes. USA consumers pay the tax (I mean tariff) at the cash register. We also pay the tariff on goods made in China unlike the nonsense that China pays according to Trump and Manuchin who know better. It is as good a fantasy as "Mexico will pay for the wall".
Regarding airplanes (we were talking about airplanes), there are so many work-arounds to the cost of the plane, the origin of the plane and ways of acquiring the plane that DL and the boys will not pay any more for their Airbus, or in a few months, Boeing airplanes. Who wins the tariff war? The rest of the world.
People who ignore history are doomed to repeat their mistakes.
Trump and Boeing - didn't you learn a damn thing when you tried to kill the C100/300 from Bombardier? You lost that battle but unfortunately killed your Canadian ally's business by forcing them to sell 51% to Airbus. Who needs enemies with friends like Trump and the USA?
You can't possibly win anything by imposing these tariffs to protect what is left of Boeing. Perhaps...
People who ignore history are doomed to repeat their mistakes.
Trump and Boeing - didn't you learn a damn thing when you tried to kill the C100/300 from Bombardier? You lost that battle but unfortunately killed your Canadian ally's business by forcing them to sell 51% to Airbus. Who needs enemies with friends like Trump and the USA?
You can't possibly win anything by imposing these tariffs to protect what is left of Boeing. Perhaps this is a delay tactic but it won't work.
Trade wars and tariffs are tough at times (I have a sizable stock portfolio and the volatility is tough) I tend to agree w the premise. For too long we turned a blind eye to China’s corporate subsidies, currency manipulation and IP theft. As someone with almost 40 years in IT (before I retired) IP is a HUGE issue w China. Most politicians don’t understand it. I disagree w Trump on much (including his general...
Trade wars and tariffs are tough at times (I have a sizable stock portfolio and the volatility is tough) I tend to agree w the premise. For too long we turned a blind eye to China’s corporate subsidies, currency manipulation and IP theft. As someone with almost 40 years in IT (before I retired) IP is a HUGE issue w China. Most politicians don’t understand it. I disagree w Trump on much (including his general manner) but something had to be done! W respect to Airbus this started many years ago and is just now being resolved
No reason to blame the President - trust me it will all work out and the works needs the US a lot more than we need them so there is leverage in these negotiations
"After getting approval from the World Trade Organization this week, the US plans to impose tariffs of up to $7.5 billion on aircraft and some other goods from the European Union."
As I understand it, its not $7.5 billion in tariffs but tariffs on $7.5 billion of goods. Even if airplanes were the only goods affected, $7.5 billion is not a lot of planes at list prices or discount, whichever is applicable.
Tariffs, and the...
"After getting approval from the World Trade Organization this week, the US plans to impose tariffs of up to $7.5 billion on aircraft and some other goods from the European Union."
As I understand it, its not $7.5 billion in tariffs but tariffs on $7.5 billion of goods. Even if airplanes were the only goods affected, $7.5 billion is not a lot of planes at list prices or discount, whichever is applicable.
Tariffs, and the WTO decision, and EU case against Boeing seem too complicated to cover in such a short post. But I get the frustration with the whole mess.
Donald Trump in his infinite wisdom has decided that to help Boeing, a company built on minimal taxes, government investment and subsidies of over $3 billion, he must punish a company that is also subsidised but by nowhere near as much. Especially when Airbus are the much stronger company at the moment as they have much more advanced products particularly in the single aisle segment. Whereas Boeing's offering has a tendency to crash and kill...
Donald Trump in his infinite wisdom has decided that to help Boeing, a company built on minimal taxes, government investment and subsidies of over $3 billion, he must punish a company that is also subsidised but by nowhere near as much. Especially when Airbus are the much stronger company at the moment as they have much more advanced products particularly in the single aisle segment. Whereas Boeing's offering has a tendency to crash and kill everyone on board.
Notice that the updates on the 737 Max seem to have gone quiet. They went from being almost weekly to nothing at all. Something tells me Boeing are struggling to find a solution other than completely redesigning the plane.
Few notes:
You can't call him an ignoramous and then say move manufacturing to Alabama... That means he is correct.
Its more than toilet seats. Its substantual transformation.
If ordered but not delivered yes you pay the tariffs.
You'd think Boeing would concentrate on fixing the MAX & dealing with the problems they are having with the USAF tanker problem.
Boeing do indeed have themselves to blame. Why invest money in building aircraft when you can issue upward of $10 billion in bonds over the last few years and enhance shareholder value by buying back your stock. Financial engineering appears to be more profitable than aeroengineering-in the short term at least.
Is a non-starter as Boeing sells more in Europe than Airbus in the US. They are shooting themselves in the foot beyond what a sane person could imagine.
@Jake
"It’s not like these decisions haven’t been largely analysed with the outcomes etc so I imagine there is some merit to this."
Lol do you think the Trump administration put even an ounce of thought into this?
@Kelly-
Ben's blog is his space & based off what I've seen posted...Ben welcomes & encourages debate/comments/opinions.
In the pecking order of the proverbial "Grande Scheme"----airlines miles/points & the "snack offerings" between Main Course offerings in International First Class...didn't make the cut :-)!!!
"First World Problem" is no longer analogous to clarity due to, in many respects, economics (i.e. Developed World/Developing Nations). The WTO, whose decision is the outline for this ill-conceived/considered posting by Ben,...
@Kelly-
Ben's blog is his space & based off what I've seen posted...Ben welcomes & encourages debate/comments/opinions.
In the pecking order of the proverbial "Grande Scheme"----airlines miles/points & the "snack offerings" between Main Course offerings in International First Class...didn't make the cut :-)!!!
"First World Problem" is no longer analogous to clarity due to, in many respects, economics (i.e. Developed World/Developing Nations). The WTO, whose decision is the outline for this ill-conceived/considered posting by Ben, is all about "Trade"....heck' it's in the name, & that's economics!
THIS IS VERY PROBLEMATIC & HYPER INSENSITIVE: Having just visited Dachau in Germany, I see far too many similarities between the megalomania of Hitler and that of Trump. Economics may be killing us and we can’t even see that.
History possesses "set-asides" that are distinct onto themselves & ought be SOLEMNLY REMEMBERED/STUDIED/HONORED FOREVER. Any reference to the Holocaust (during the high holly days...on an airline blog...really???) as a contrast/comparison, is only made by a fool. Study, read, become informed re: the Holocaust & perhaps you'll gain some perspective---and respect---for why invoking "it" in any regard is unwise. 9/11? If you're gonna be all pious....meh....in terms of life/death, it was a morning's work for Police Battalion 101.
As Greta Thunberg might say....Dachau/Hitler referenced on OMAT....“How dare you!”.
Great Site Ben!
-David (NOTE: BEN...IF YOU SEE MY EMAIL ADDRESS, YUP...THAT'S ACTUALLY MY NAME!)
@Abe and yet he and Ivanka are happy to manufacture all their trash overseas
So in other words Trump wants to keep the plants in America and protect American jobs. Wow how horrible of him.
The situation will most likely be reversed in 2-3 months when Europe is given the green light to tax US goods due to "illegal subsidizing" of Boeing, but will it exactly result in a stalemate? No:
These 2-3 months are exactly when Boeing will be attempting to have Europe re-certify the 737 MAX.
Good luck with that !!!
@Jackie - get a life. FYI nobody wants the US around in their backyard. The US took advantage of Europe after WW2. Just look at all the talent they took away - people who set up the technological advancements of the 60s and 70s when America boomed. All of it on the backs of Europeans because their home was destroyed while the US was far away and safe from the bombs. The US military is...
@Jackie - get a life. FYI nobody wants the US around in their backyard. The US took advantage of Europe after WW2. Just look at all the talent they took away - people who set up the technological advancements of the 60s and 70s when America boomed. All of it on the backs of Europeans because their home was destroyed while the US was far away and safe from the bombs. The US military is a bane to other nations now. Anyway, thanks to your Trumpet, you are becoming less relevant in the world.
@Rob - but let's not forget why those fines were imposed - because of MASSIVE data and privacy breaches - i.e. Google and FB using your personal data and selling it to advertisers (which of course they profited from in the form of billions). Those fines were deserved. At least in the EU they somewhat care about their citizens and hence the "anti-corporate" activities - including subsidies for aircraft.
BTW - I've seen the...
@Rob - but let's not forget why those fines were imposed - because of MASSIVE data and privacy breaches - i.e. Google and FB using your personal data and selling it to advertisers (which of course they profited from in the form of billions). Those fines were deserved. At least in the EU they somewhat care about their citizens and hence the "anti-corporate" activities - including subsidies for aircraft.
BTW - I've seen the list and Scotch whiskey is on it... I mean who in their right mind would add that to the list???
United Airlines also has Airbus A350s on order. Did you all forget about them?
If Airbus will just investigate Biden, this whole thing can be made to go away. Also, book some rooms at the hotel; they don't have to occupy the rooms, just book and pay.
It's easy to win with tariffs. There will be so much winning, you'll be tired of winning.
I wrote this trying to be funny, but it isn't funny. It's so awful. America is a banana republic now.
@kelly Mass extinction ha ha ha we haven’t been more people on the 3rd rock than now, mass extinction will begin when we don’t burn fossil fuels, to feed the masses.
And you are quoting a diagnostic kid, get real.
There is a reason for the correctional institutions, so I am puzzled over people who doesn’t get the punishment with trade tariffs.
You don’t applause bad behavior you punish it.
Ugh - perhaps I'm in the minority here, but I find all of this dialogue a complete waste of time and energy. It may make it easier to call this issue a 'first world problem', but it doesn't make it better or right.
I don't give a rat's you-know-what about tariffs on Airbus or Boeing or whether its fair or not. I do think the US has more problems than the rest of the...
Ugh - perhaps I'm in the minority here, but I find all of this dialogue a complete waste of time and energy. It may make it easier to call this issue a 'first world problem', but it doesn't make it better or right.
I don't give a rat's you-know-what about tariffs on Airbus or Boeing or whether its fair or not. I do think the US has more problems than the rest of the world and is not the shining example of freedom it once was. Having just visited Dachau in Germany, I see far too many similarities between the megalomania of Hitler and that of Trump. Economics may be killing us and we can't even see that.
BIGGER issues exist worthy of everyone's time rather than this one. To quote Greta Thunberg:
"Entire ecosystems are collapsing. We are in the beginning of a mass extinction, and all you can talk about is money, and fairy tales of eternal economic growth. How dare you!"
@ Jackie
us may be the US like a belly-button thinking, but us is certainly not the whole world and the whole world pretty much sneers at the US, in Asia they are often called barbarians, not just because they love burgers and bad beer.
Germany can't say much because of WWII and the US have them by the balls. But other EU governments may actually want all US soldiers out of their territory...
@ Jackie
us may be the US like a belly-button thinking, but us is certainly not the whole world and the whole world pretty much sneers at the US, in Asia they are often called barbarians, not just because they love burgers and bad beer.
Germany can't say much because of WWII and the US have them by the balls. But other EU governments may actually want all US soldiers out of their territory the sooner the better (with the exception of the three Baltic states and Poland due to centuries of frictions with Russia). All EU chancelleries are tired of the US playing solo as they see fit, tired of the US USing the UN to wage wars and lie to the whole world ( remember the weapons of massive destruction ? of which the US are the prime producers ? ) also tired of losing contracts with Iran or Iraq, the economy of which the US literally destroyed to put their hands on the oil wells.
Because Böing has wider cross-subsidies per the military programmes and because of the K130 foul play, the EU will retaliate. Specially now that the US and the UK are playing against the EU. By the way, Böing ( Boeing ) is being böse and playing stupid : asking for 100% in sanctions is as childish as what they did to Bombardier. Be sure Airbus will find a smarter way to retaliate.
Airbus can build planes in China since they have a factory there.
@Paul
I'm "banging on" about things you clearly don't know anything about.
Isn't it dumb for EU to attempt to take on us or be against us? We have many solider stationed there and they have none here.
"There’s certainly a shake-down going on here, but it’s not the EU stealing lolly from poor defenceless US corporations."
I love how someone suggests that attempting to keep more of the money you've earned is a "shakedown". Orwell would be proud.
@ Rob
"EU shakes down US tech companies for multi billion dollar fines and special industry taxes in regular cash grabs"
What are you banging on about?
Facebook paid tax in the UK last year at about 1% of its UK revenues.
Google paid tax at a rate claimed to be in the low 20s against profits generated in the UK (though that was after all sorts of internal charges and transfers to shell...
@ Rob
"EU shakes down US tech companies for multi billion dollar fines and special industry taxes in regular cash grabs"
What are you banging on about?
Facebook paid tax in the UK last year at about 1% of its UK revenues.
Google paid tax at a rate claimed to be in the low 20s against profits generated in the UK (though that was after all sorts of internal charges and transfers to shell companies in other countries with far lower tax rates. Because allegedly Google's European headquarters is in low-cost Dublin, even though they seem to be building one of the world's largest corporate headquarters buildings in, er, central London). According to some estimates, Google has so far avoided paying £1.5 BILLION in UK taxes.
There's certainly a shake-down going on here, but it's not the EU stealing lolly from poor defenceless US corporations.
"In what can ONLY be described as the latest trade spat between the US and the world, many Airbus jets are about to get a lot more expensive for US airlines. President Trump has said that trade wars are good, and easy to win… is that the case here?"
Ben,
You're implying that the WTO's determination re: Airbus subsidies is 1) NEW ("latest") 2) US v. World (a pillar of the current exec-branch admins...
"In what can ONLY be described as the latest trade spat between the US and the world, many Airbus jets are about to get a lot more expensive for US airlines. President Trump has said that trade wars are good, and easy to win… is that the case here?"
Ben,
You're implying that the WTO's determination re: Airbus subsidies is 1) NEW ("latest") 2) US v. World (a pillar of the current exec-branch admins posture) 3) Impacts MANY jetS for US AirlineS...(plural).
Would it be incorrect to state that you're "reporting" upon this "news item" is FAKE NEWS????
In TRUTH, 1) The "tariff" is the result of a 15 YEAR WTO case that has just been determined w/ a fixed amount penalty ($7.5B), 2) The timing of the decision---AFTER 15 YEARS---has nothing to do w/ the current exec-branch, 3) The only US AirlinE possibly impacted is Delta & exclusively on Widebodies....(NOTE: 15 years ago DELTA was ALL BOEING/McD D....you gotta go back 24 years re: any DELTA/AirBus---A310's acquired in Pan Am deal. Northwest brought the AIRBUS).
10% on a specific AirBus "type" plane exclusively manufactured in Europe w/ a total US AirlineS "backlog" of 57 planes ordered by 1 airline...is NOT "...many Airbus jets are about to get a lot more expensive for US airlines." Also....VERY bad idea to use the word "ONLY", EVER!!
I'm apolitical. Suffient fodder implicating the current US exec-branch appears to exist. I've yet to read or watch the MEDIA "self reporting" upon itself in regards to FAKE NEWS? Why is that? Is the MEDIA complicit w/ what occurred on 11/8/16??? All of the reporting I was exposed to (majority of which would be termed liberal outlets)...had "truthfully" reported---as of 6/16/15 that the TRUTHFUL reality of the AM on 11/9/16 was an ABSOLUTE IMPOSSIBILITY. Well, as we know, the IMPOSSIBLE became TRUE. Perhaps...a crystal-clear "reality check" of how soooo many could be soooo wrong is more prudent than simply pointing the camera back @ who proved the MEDIA wrong & banging the drum re: how wrong & untruthful that "who" is today. Lastly....I'd wager that the MEDIA has far more invested interest ($$$$) in seeing the current exec-branch occupant continue to "occupy" than they'd ever admit. If it's good for ratings it's good for the American People....err, ahh, ummm.....I meant PROFITS.
Great Blog!
-David
Clearly Boeing is hurting at the moment but I wouldn’t characterize Airbus as “thriving” given the recent cancellation of their A380 program, which was a huge failure from a business standpoint. This whole tariff thing is counterproductive and will not result in more American jobs or less purchasing of products produced in the EU or elsewhere. Boeing needs to clean shop from the top down in the aftermath of the MAX disasters - what are they waiting for?
It's not like these decisions haven't been largely analysed with the outcomes etc so I imagine there is some merit to this.
America first?
This decisions makes Airbus products more expensive for Delta and makes Delta less competitive especially on international routes.
Who looses? Delta, Delta shareholders, Delta customers. Who wins? Airlines who compete with Delta. The ME3, the European and Asian airlines.
Who looses because of the tariffs of the Chinese products? The american customer who buys at companies like Walmart. Wo wins? Manufacturers in countries like Vietnam or Malaysia where production is moved...
America first?
This decisions makes Airbus products more expensive for Delta and makes Delta less competitive especially on international routes.
Who looses? Delta, Delta shareholders, Delta customers. Who wins? Airlines who compete with Delta. The ME3, the European and Asian airlines.
Who looses because of the tariffs of the Chinese products? The american customer who buys at companies like Walmart. Wo wins? Manufacturers in countries like Vietnam or Malaysia where production is moved to.
America looses first.
Boeing is so desperate now, pushing for a 100% tariff, did they really think that was going to work? This is so stupid, the EU will just turn around and do the same to Boeing. No winners here. Boeing should rather work on building better planes, sort out their Maxed-sized mess and build a new 777 that doesn’t shed cargo doors when tested. Their situation is what you get when you underestimate your main competitor...
Boeing is so desperate now, pushing for a 100% tariff, did they really think that was going to work? This is so stupid, the EU will just turn around and do the same to Boeing. No winners here. Boeing should rather work on building better planes, sort out their Maxed-sized mess and build a new 777 that doesn’t shed cargo doors when tested. Their situation is what you get when you underestimate your main competitor and respond with a back of a fag packet effort to something as successful as the A320 series.
I'm looking forward to the tariffs on Boeing aircraft next week.
Boeing will need much more to survive based on their current mess than Airbus will.
Let’s keep in mind the broader landscape where EU shakes down US tech companies for multi billion dollar fines and special industry taxes in regular cash grabs that go unanswered. If anyone is going to shake down google and Facebook and use the cash to fund bloated social programs, it should be us.
Trump is alienating everyone . Look at him with the Finnish premier yesterday. He’s an uneducated uncultured dotard and drate poke
There’s more to the world than the US
One reason the U.S. has a trade deficit with the EU is that the U.S. generally produces unsafe and low-quality products -- from Boeing planes to chlorinated chicken -- while the EU generally produces safer and higher-quality products -- from Airbus planes to the world's best pork.
Let’s all forget one of the key reasons for the Great Depression.
Not in the market for an Airbus plane but wine, cheese and olive oil? Egads!
It seems that Boeing has its dirty little hands all over the government... I'm glad I'm not a consumer in the US! It's also another "excuse" for the airlines to raise fares I suppose, call it a "tariff surcharge" - you know, right next to "fuel surcharge".
Just like Ben I have no expertise in the matter, either, so my opinion is equally without value to anyone. But my guess is that the EU would be doing the exact same thing if their case against Boeing were decided first. And likely any other country would do the same in a similar situation after such a decision by the WTO.
@Endre - Please shut up. NOBODY cares about your personal life.
“... this comes at the same time that Boeing is really struggling while Airbus is thriving.”
I’d suggest that the timing is probably not a coincidence... Boeing needs all the help it can get.
This is what comes of electing a child-like, albeit combative, president: he is blinkered, has picked a fight with everyone ( other than the creepy lapdog toady in Australia ), and sees international trade as some kind of NYC-style property negotiation.
We’re only missing Dr Strangelove’s finger on the button ( ...and at least Trump had the wit to fire that Bolton creature before such a scenario could develop)
so all the fawning over current adm1nstrat1on still couldn't save De1ta from getting their planes tariff'ed
Thank god for Trump! It's about time the US Citizens are put first unlike the ignoramus Obama and his democratic minions. America First!
Not to forget that the EU gets to retaliate immediately, due to previously won WTO disputes (https://leehamnews.com/2019/09/30/eu-can-retaliate-against-boeing-immediately-old-wto-win-outstanding/)
What's silly, and isn't included in Ben's synopsis, is that instead of ratcheting up the tariffs on Airbus planes to hit the number allowed by the WTO (certain logic???) the US is also increasing tariffs on wine, cheese, and olives. Maybe this is also designed to hurt Delta by taxing their SkyClub buffet and bar...maybe they can pay the tariffs in sky pesos?
As a nearly loyal Delta flyer I'm still confounded by the...
What's silly, and isn't included in Ben's synopsis, is that instead of ratcheting up the tariffs on Airbus planes to hit the number allowed by the WTO (certain logic???) the US is also increasing tariffs on wine, cheese, and olives. Maybe this is also designed to hurt Delta by taxing their SkyClub buffet and bar...maybe they can pay the tariffs in sky pesos?
As a nearly loyal Delta flyer I'm still confounded by the way Delta cloaks itself in the stars and stripes and attack foreign competitors while they simultaneously invest in foreign airlines, retire Boeing planes and replace them with new Airbus ones, and effectively "outsource" flights that were once on DL metal with DL crews with Korean Air (like their intra-Asian network they acquired with NW), Aeromexico, and soon to be LATAM. All this is happening while their Skyteam/life partner AF/KLM is busy buying Boeing aircraft instead of their domestic Airbus options.
Globalism is at its worst when competition isn't fair and governments make it worse by meddling in the game. Regulation-lite doesn't work.
"President Trump has said that trade wars are good, and easy to win…"
Trump is an economic ignoramus and these type of actions validate it. Tariffs are simply a euphemism for taxes and are paid by individuals in the domestic market. U.S. citizens are being penalized by Trump's ignorant decisions.
Daniel,
Europe will "win" a WTO case against Boeing in a couple months. This whole thing is stupid. No wonder Trump loves it.
what happens with items that are ordered and signed but not paid or delivered yet, e.g. future Delta A350's? If I look at my personal life, I can buy something from Amazon today, but it is not invoiced and paid till shipping the item. The exact tax is calculated at the time of shipment, not when "contract for purchase" was executed.
They won a trade dispute at the WTO for illegally subsidizing Airbus. The US didn't just get "approval from the World Trade Organization this week"
You really need to provide the context to this one.
Literally all it takes is for Delta to have one of their European subsidiaries (Virgin, AF-KLM) "buy" these planes for them, then wet lease it for them. Alternatively, establish a shell company in Ireland where taxes are favourable, call it "Delta Ireland", then lease it to themselves. It shouldn't be hard to skirt
The plant in Alabama was originally going to build the A330 tanker for the USAF before Boeing had the contract killed. So it's possible they might start building the A330NEO here depending on their order book.
Thank goodness, its about time! We've been taken advantage of for way.... to long
I think that there needs to be a frame of reference here, this is the culmination of a case was brought 15 years ago. This is not an initiative of the current trade war, it is the way that sanctions should be decided in a global economy as decided by the WTO. The decision caps damages at 7.5 billion annually. https://www.marketplace.org/2019/10/02/wto-rules-eu-gave-illegal-subsidies-airbus/
How much of the assembly has to happen in the US? Just wondering if Airbus could build the planes in Europe and fly them to the US to install the toilet covers..
These tariffs are always such a great idea. Like pissing in your pants when it's really cold, feels really warm for a moment..
Just like the steel tariffs, expect these not to last long once the administration realizes that they are counter productive. Boeing is competing just on price it seems amd cost cuting to make it work (and failing at it...)
The EU has a similar case at WTO against Boeing which is running about 6 months behind, so expect counter measures against Boeing once that plays out
While I don't have an opinion on the tariffs per se (I'm not any more qualified to have one than, say, Ben) it's worth noting that these are not the same as the "let's tax everything" trade war tariffs on China but instead the result of the a decision rendered by an international trade body.
What also makes this kind of silly is that Airbus plants in the US get a majority of their parts...
While I don't have an opinion on the tariffs per se (I'm not any more qualified to have one than, say, Ben) it's worth noting that these are not the same as the "let's tax everything" trade war tariffs on China but instead the result of the a decision rendered by an international trade body.
What also makes this kind of silly is that Airbus plants in the US get a majority of their parts from the EU.
Why is this regarded as silly? While I'm sure it's an accident (given the inability of the current government to form policies intelligently) a well-crafted policy might well be the same -- taxing the offender while attempting to spare American jobs.