U.S. Readies $11B in Tariffs on E.U

https://www.nytimes.com/2019/04/09/us/politics/boeing-airbus-tariffs.html

by sky_nox • 7 years ago

50 87 7 years ago

munk-a6• 7 years ago

That's some particularly hilarious timing giving boeing's recent "unsafe to fly our plans" headline news.

As someone in Canada it's been disappointing to watch the massive internal subsidies given to Boeing (from the US government) help sink Bombardier - though the company also did under-perform.

Rebelgecko2• 7 years ago

Doesn't every country do the same thing— albeit perhaps not at the same scale? When Embraer complained about Bombardier's subsidies from the Canadian government, the WTO decided that they were illegal. Then Bombardier complained about Embraer's subsidies from the Brazilian government and the WTO decided that those are illegal too.

munk-a6• 7 years ago

Yea, but the WTO hasn't gone after the blatant US protectionism - that's the issue. Most other countries are kept relatively in check in terms of trade fairness, but the US is riding their golden chariot.

matt40772• 7 years ago

It's probably somewhat rare in industrialised democracies these days. Many trade deals limit subsidies (hence this WTO ruling). It is also difficult to give one-off subsidies in diversified markets, because (domestic) competitors would complain/sue.

The EU has especially stringent rules against this, making (for example) shenanigans such as Amazon's HQ2 race-to-the-bottom impossible. That's also what got Apple and Ireland into trouble. It's effectively a cartel of countries pooling power to counter multinationals' ability to offshore profits to the cheapest jurisdiction.

The are exemptions: The EU and US massively support agriculture with direct payments. Canada does the same with milk quotas. (These two systems are somewhat incompatible: allowing subsidised US milk to be sold for Canada's protected high prices would amount to double dipping. Hence some disagreements across that particular border).

Aircrafts are a rather special beast: there's a national security angle, they are objects of national pride, and both the EU and US have one large manufacturer. Airbus is also diversified across many EU countries, assuring them wide political support.

village-idiot3• 7 years ago

Subsidy of “national champion” companies is pretty common but not universal. Sweden allowing Saab to fail without opening up the national purse comes to mind.

Defense related industries are typically pretty pretty high on the subsidy list though, for all the obvious reasons.

Thorncorona2• 7 years ago

The irony of Boeing complaining about favorable treatment by the government is palpable.

olliej4• 7 years ago

Other countries are going to start ignoring FAA safety rulings now, so meaning that in exchange for a short term monetary gain a bunch of politicians and executives will probably cause significant long term costs - although the people who made those decisions and took those bribes won't have to pay for those consequences, they've already got there's :-/

dmix2• 7 years ago

This is some weak logic. So a super-high capital business like an Airline is going to flaunt aircraft safety rules, potentially risking hundreds of lives of their customers and employees... to what exactly? Buy some cheaper uncertified Chinese(?) aircrafts or fly other certified aircrafts unsafely...to make a little extra money? And then run away when the lawsuits and families of the dead come chasing you?

stunt• 7 years ago

How many time it has to happen until we learn it. Every time an industry is left unwatched crisis happens because there is always short term monetary gain for a bunch of executives. It was the same thing with SCC going blind about big banks before 2008. FAA - Boeing relationship is an example of SCC - BigBanks relationship before 2008.

marcrosoft3• 7 years ago

Good! In the past few years the E.U has passed absolutely ridiculous laws and taxed U.S. based companies through these ridiculous laws because they want a slice of the pie too.

Edit: They are getting tax through fines by said ridiculous laws not by direct tax.

oneplane2• 7 years ago

Such as? As far as I know the EU has had a rather positive position regarding the US for the last decades, and still does, even after the most recent election.

According to this page: https://ustr.gov/countries-regions/europe-middle-east/europe... it's rather balanced. Whoever upsets that balance might need to reconsider, but the US would definitely have a problem if less stuff comes in from the EU. For the EU, however, it's less of an issue: http://trade.ec.europa.eu/doclib/docs/2006/september/tradoc_...

stale20023• 7 years ago

Well, one recent example is that of article 13, which is a massive expansion of copyright law.

Yeah, no thanks. I do not at all what expansive intellectual property laws to be spreading all over the world, and hurting creators like that.

Creators benefit way more when it is easy to share and use and modify other people's content.

olliej4• 7 years ago

Oh, you mean like direct tax subsidies, "investment" incentives, and overpaying for defense contracts? Because that's what the US does, and the WTO also ruled that that is an illegal.

That fact that you seem to believe the rest of the world is abusing the US is more about a misplaced belief that the US's abuse of other countries is perfectly acceptable.

If the US wanted to lead by example, it could do what NZ did a drop subsidies and tariffs on agriculture. But that's not what you want.

angott2• 7 years ago

If all European countries really wanted was just a slice of the pie, they could just put a tax on foreign-owned tech companies (like France is doing).

Are you seriously suggesting the EU took the trouble of implementing GDPR, causing significant disruption to European companies as well, for the sole purpose of fining FAANGs and making money out of it?

marcrosoft3• 7 years ago

Yeah, pretty much.

themagician• 7 years ago

Yeah, what are you talking about? As a business selling into Europe you pay VAT and that's about it. But VAT has been around for a long time.

If you an office in Europe then I guess you are subject to additional taxes? But you are operating in Europe, so how is that unreasonable?

Maarten882• 7 years ago

What ridiculous laws do you mean? GDPR? Or monopoly abuse fines? Do you think US businesses should be able to run under US law in the EU, meaning they can do whatever they want to consumers, monopolizing markets by violating local laws, taking in huge profits, and then hardly paying corporate taxes (neither in EU nor US)?

None of that has anything to do with these tariffs, btw.

marcrosoft3• 7 years ago

Do you think the EU should be able to enforce a law on a global scale and completely ignore country jurisdiction like they attempt to do with GDPR?

ulfw2• 7 years ago

(deleted)

munk-a6• 7 years ago

I mean, the current administration was elected on a platform of "America First" so, what did you think would happen?

I think the US has been self-centered for quite some time, and there was a hilarious thread in a different article that went into the idea that America is the world-policeman that everyone wants but... yea, for equal treatment and to avoid regulatory capture - one needs to avoid that dying empire.

ulfw2• 7 years ago

It's always been America First. It's becoming a mindset of "America Only". That's the problem.

gumby4• 7 years ago

The so-called "America first" policy works against the interests of the United States though. Or is it "destroy America first, screw up the rest later?"

sonnyblarney2• 7 years ago

"America First" ... "US has been self-centered for quite some time"

Anyone who suggests that France is not 'France first' or that Switzerland is not 'Switzerland first' etc. etc. has not been paying attention.

gumby4• 7 years ago

I like the part where they complain bitterly that people they called stupid, lazy leeches won't go along with boycotts of, say, Iran or Huawei, just because they were told to.

I learnt in the third grade that that approach doesn't work.

sonnyblarney2• 7 years ago

Nations are economic competitors, it's really naive to put this in terms of 'selfish / confrontational'.

All nations are 'selfish' in direct trade terms.

In terms of Geopolitics, there's an enormous degree of material goodwill added by the US following the WW2 and the creation of the NWO and not all of it is 'repaid' to them. The entire framework of global trade relies on the US, even today. Most of the free world still depends on the US for defence, at least partially and in some very 'lynchpin' ways.

The US's negotiations with China are reasonable.

The negotiating positions on refiguring NAFTA were mostly reasonable, although I don't think it will make a difference.

And FYI it's the EU that's constantly skittish, changing their minds, and arbitrarily taxing and back-taxing US companies often for their own, self directed problems (i.e. Irish/Dutch/Luxembourg taxation).

Even though Donald Trump is a huge political jerk, making noise for the sake of making noise, there's little on the table that is entirely unjust. The 'bad noise' is mostly rhetoric.

gumby4• 7 years ago

More subsidies to that callous killer Boeing, from a government of the megacorps, by the people, for the megacorps.

dmix2• 7 years ago

That's what almost always the outcome of gov economic policies. Help a few large companies who are friends with the gov, whether it's giant food producers producing corn no one wanted in the first place, pharma companies competing against generics, banks making a killing on low-end mortgages, etc, while increasing costs and other burdens on regular citizens (or pushing unneeded externalities on to other countries).

We're experiencing that in Canada too with the dairy cartel getting cross-party support from both liberal and (mainstream) conservative parties because it helps a few local farmers stay moderately-wealthy while 100% of the population has to pay more for dairy products.

PHGamer• 7 years ago

you cant kill boeing. if shit hits the fan theyre pretty much our only airline manufacturer. i mean what happens if the eu tells the us to fuck off. we don't get any more airbuses and if boeing is dead no way to make our own planes.

gumby4• 7 years ago

They are hardly the only aircraft manufacturer, though decades of neglect of antitrust has allowed them to become he only remaining US manufacturer of civilian aircraft. But if they are allowed to let them die we can still get large passenger aircraft from Airbus, smaller ones from Brazil or China. Not to mention from new entrants that will start up when the big gorilla goes away?

jorblumesea2• 7 years ago

Sickening that we're cozying up to authoritarian Russia and China while alienating Western democracies. When did the enemy become our friends?

alanpetrel• 7 years ago

And when did your friends become your enemy?

citilife• 7 years ago

In 2016 the US imported $416B and exported $270B to the EU. Although $11B is a large number, it's a 2.6% tax on the total. More interestingly, is what they are taxing.

Personally, I'd rather have tariffs than income tax. At least then I can choose what to buy.

ganeshkrishnan• 7 years ago

I sell in US and I also support ecommerce sellers in US. Most of us have raised the prices of products to counter the tariffs. You are actually paying income tax as these tariffs.

Some products which can be produced in US will benefit from tariffs. But the whole point of not having tariffs is to buy cheap labour from outside and move your own country up the value chain.

Also, no one is going to start manufacturing these products because the next President is going to remove the tariffs and destroy the advantages, if any.

Just my 2 cents.

latch• 7 years ago

Maybe this is naive, but don't tariffs, like subsidies, risk encouraging local inefficiencies? So your point of view seems shortsighted?

I understand that in theory they can be used to capture externalities to level the playing field, but I find it hard to believe anyone can really figure anything close to the real amount of "unfairness" (for lack of a better word)

arcticbull8• 7 years ago

Consumption taxes are regressive, income taxes are progressive. The poor are disproportionately impacted by tariffs and sales/consumption taxes. The administration is taking money out of the hands of Americans under a truly misguided idea of what a trade deficit is.

pmorici• 7 years ago

I don't think that is a given. If you put the consumption tax only on luxury goods it could be progressive. I doubt the poor are buying Rolex watches and if they are taxes aren't the problem.

koolba• 7 years ago

Depends on what you tax. A high tariff on imported caviar or luxury sedans isn’t going to impact Joe Sixpack.

kenneth2• 7 years ago

Good. Given a fair tax system would be proportional / flat, perhaps a little imbalance in the other direction evens it all out towards flat / proportional tax (everyone at the same percentage)

harry8• 7 years ago

This is actually wrong and for reasons that surprised me when I found out and it does not require luxury taxation.

Many? Most? People earning (say) $500k+ dodge their income tax, legally and illegally. There's a whole industry of it. Yes let's clamp down on that as we've been trying to across the world for decades. Not likely to eradicate it by next year though, right?

So you tax consumption at a flat rate /in addition/ to income tax. You ensure the people earning less get a tax break or a transfer payment increase to cover the consumption flat tax and then some.

All those wealthy people are now paying that base rate on their consumption in a way that is basically unavoidable.

So for your progressive taxation, the initial bracket cannot be avoided. People in higher brackets still should pay more.

By using consumption to tax the initial bracket the poor get an increase in after tax income. The rich (on average) get a higher tax bill.

Yes it depends on the modelling and getting the implementation right as all tax regimes do. Yes it is progressive.

When you see consumption tax as necessarily regressive (as I did once) you are missing the most important thing about them which is they really aren't. They're the best way of getting a big tax revenue increase at the expense of those who cheat. I like that, myself.

village-idiot3• 7 years ago

Trade balances are a silly thing to measure in the 21st century when a lot of value moves around in the form of intangible services.

h3throw2• 7 years ago

It seems most posters didn't really read the article as the tariffs appear to be in compliance with a WTO ruling on something illegal the EU is doing wrt subsidies to Airbus. Unsurprising that the NYT and HN goes with the lead that Trump is unilaterally fucking up world order yet again but in this case it doesn't seem so deserved.

I really wish both groups (the NYT and HN) would be more nuanced when it comes to Trump. Otherwise, we all end up justifying Trump's and other Alt-Righties' claims of bias.

matt40772• 7 years ago

Every word of the article's headline is true, and the facts it contains (subject, object, action, and magnitude) are the most important facts of this story.

The reasoning you want to see in the headline is in the first paragraph.

If you're interpreting the headline as "Trump is unilaterally fucking up the world order yet again" then that is something that happens entirely in your head.

It's somewhat bold to fault others for an error that is entirely yours.

h3throw2• 7 years ago

It's all in my head?

https://news.ycombinator.com/item?id=19629918

https://news.ycombinator.com/item?id=19629960 (now deleted)

https://news.ycombinator.com/item?id=19629995

I think wrt NYT, the facts are all true but purpose should also clearly be a part of it. Imagine a headline which said "Trump kills man on White House lawn with Colt .45" and the man was attacking him with a machete.

When many (most?) people are aware of the prior tariff tirade by Trump and not everyone reads the meat of an article, I think it's irresponsible to not include the _why_.

qilo• 7 years ago

Wanted to read the article, but instead got this: "You're in private mode. Log in or create a free New York Times account to continue reading in private mode." So headed for page source and stumbled onto this wtf:

  <!--
  ---------- Forwarded message ---------
  From: Kingsbury, Katie <katie.kingsbury@nytimes.com>
  Date: Wed, Apr 10, 2019 at 2:30 PM
  Subject: Rollout
  To: Bennet, James <james.bennet@nytimes.com>

  James,

  Here’s a line up for the launch tomorrow, all of these will be online before Sunday:

    • A.G.’s publisher’s note about The Times
    • Manjoo on household items that track us
    • Wu on the history of privacy
    • Jeong on A.I. and insurance
    • Metzel on genetically engineered babies
    • Warzel on tech CEOs in their own words
    • Fr. Martin on privacy and faith
    • Emily Chang on privacy as a feminist issue
    • Douthat on our post-privacy order
    • Swisher on privacy regulation
    • Irby on what’s funny about all this.

  Plus, of course, your piece if you can actually get it done in time.

  Next week, we’ll drop the piece about how we turned a public camera in Manhattan into a facial recognition equipped surveillance machine and who we caught with it.

  The vanity URL is locked in as nytimes.com/privacy-project and the social team has spun up the @PrivacyProject account.

  Katie
  -->

propogandist• 7 years ago

this appears to be a legit email, although I don't understand how this got into the page source.

The URL posted in the email nytimes.com/privacy-project redirects to https://www.nytimes.com/interactive/2019/opinion/internet-pr... and there are articles that are published on 4/11/2019 whereas it's only 4/10 as of me writing this comment.

tdhoot• 7 years ago

Wow, how is this comment not getting more notice. This is a hilarious screw-up. Seems like the NYT is launching a new privacy initiative tomorrow.

U.S. Readies $11B in Tariffs on E.U

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