“The EU Commission Would Be Wise Not to Impose Tariffs on the USA Approved by WTO”

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ZEW Economist Friedrich Heinemann on the Decision of the World Trade Organization Mediators

Prof. Dr. Friedrich Heinemann, head of the research area "Corporate Taxation and Public Finance" at the ZEW Mannheim, on the decision of the WTO arbitrators.

World Trade Organization (WTO) mediators have decided that the EU can apply tariffs on US imports. The decision was taken after the USA granted unlawful subsidies to aircraft manufacturer Boeing. Professor Friedrich Heinemann, head of the Research Department “Corporate Taxation and Public Finance” at ZEW Mannheim, comments on this matter:

“The EU Commission would be wise not to impose tariffs on the USA approved by WTO. The cards for US trade policy will be newly shuffled on 3 November due to the US presidential election. Even if Joe Biden were to become US president, he would not lead the effort to make the USA free trade proponents. He would, however, be more open to compromise and multilateral solutions than current president Donald Trump. New hit backs from Europe through deeply symbolic import tariffs on US goods would only turn the public against Europe and also limit Biden’s scope for a liberalisation of trade.

European consumers would also have to shoulder the costs, if ketchup or games consoles imported from the US are burdened with EU tariffs. Therefore, the WTO verdict will help the EU most if it views this as a bargaining chip in forthcoming negotiations instead of actually enforcing it.”