September 29, 2020

Trump raises Airbus tariffs to 15%

The measure harms mainly US airlines, which will have to pay more for European aircraft in the midst of Boeing’s reliability crisis

The dreaded threat has reached the European aviation industry. However, it comes at a time of fall from its main competitor, the American Boeing, which did not receive any order last January for the first time in 58 years following the crisis of the 737 Max model. The US Administration has raised the tariff rate from 10% to 15% imposed on airplanes imported from Airbus, a measure that will take effect from March 18. The decision, announced by the Office of the Foreign Trade Representative, is part of a long dispute over which the Trump Administration has tried to penalize the European Union for offering “illegal” subsidies to Airbus, which harmed the US aircraft manufacturer. Boeing, which also receives juicy indirect aid and finger contracts from the Pentagon. According to the WTO ruling last October, The four most affected countries offered Airbus financing at a lower interest rate than the market, which allowed the company to develop some of its most recent and advanced models.

On October 18, Washington imposed import tariffs on European aircraft manufacturer Airbus of 10% and 25% on a series of exports of European food products, such as Spanish cheeses and olives. This came after the World Trade Organization (WTO) gave Trump the green light to impose tariffs on European imports of 7.5 billion dollars in response to subsidies to Airbus, described as “illegal.” After knowing the decision, Airbus has assured that the increase in tariffs will affect US airlines, which are already facing a shortage of airplanes in a context marked by the crisis of the US manufacturer Boeing with the 737 airplanes. The European aircraft manufacturer has assured that it will continue talks with its US clients to “mitigate the effects of tariffs on as much as possible, ”although he expects the US Trade Representative’s office to change his position, according to Reuters.

“Restructuring” in defense

Despite the good progress of the aviation industry, the European giant is no stranger to the ups and downs. Last Thursday, the CEO of Airbus, Guillaume Faury, announced another restructuring of the Defense and Space division, in which 70% of its 13,000 employees in Spain and most of its 4,000 workers in Andalusia work, which has alerted unions to mobilize. Faury made this announcement in the presentation of the results of Airbus of 2019, exercise in which it lost 1,362 million euros, after paying almost 3,600 million and avoiding trials for corruption and another 1,212 million to balance the losses of its A400M military transport aircraft , which is assembled in Seville. This provision is added to previous ones, amounting to 9,000 million, and will alleviate the lack of orders for this aircraft, whose possible exports to Saudi Arabia remain vetoed by Germany.

Airbus has slowed production of the A400M, of which it has already delivered 88 of the 174 units ordered, and has disbursed some 30,000 million euros in the launch and provisions of this program. The new restructuring of the Airbus defense division has increased the concern of the Andalusian aeronautical sector, which is 80% dependent on the European aeronautical consortium, especially its military programs, and has activated CC OO and UGT to prepare mobilizations.


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