Policy Article

Airbus-Boeing conflict endangers ceasefire with USA (in German)

Kiel Policy Briefs, 128

The World Trade Organization (WTO) has authorized the Unites States to impose tariffs on goods from the European Union with a combined import value of Euro 5-8 bn. The ruling follows from export subsidies given to Airbus by the EU. The tariffs are likely to hit the aerospace industry in Germany, France and the United Kingdom. The authors point out, however, that the confrontation is not worthwhile for the USA, as it endangers its trade surplus with the EU for large aircraft. In their model-based analysis the authors come to the conclusion that in France and Germany these tariffs are likely to destroy up to Euro 2 bn. of the respective GDP. Uncertainty surrounding the exact targets of tariffs also causes considerable damage.

Authors

Vincent Stamer