US increasing tariffs on Airbus planes to 15 percent

An airport worker guides a Delta Air Lines Airbus A319-100 plane on the tarmac at LAX in Los Angeles, California, on Jan. 6, 2020. (REUTERS/Lucy Nicholson/File Photo)
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Updated 15 February 2020

US increasing tariffs on Airbus planes to 15 percent

  • Airbus says higher US tariffs on EU planes will harm US airlines, consumers
  • Trump wants EU member states to further open their markets to American products, particularly agricultural goods

WASHINGTON: The United States is increasing tariffs on Airbus planes imported from Europe to 15 percent beginning March 18, authorities announced Friday.
The duties have been at 10 percent since October, when Washington hit $7.5 billion in European products with tariffs.
The announcement from the office of the United States Trade Representative came just days after President Donald Trump said it was time to talk “very seriously” about a trade deal with the European Union.
Washington imposed punitive taxes on the $7.5 billion in European products after the World Trade Organization (WTO) gave the United States a green light to take retaliatory trade measures against the EU over its subsidies to European aerospace giant Airbus.
Other products — including wine, cheese, coffee and olives — have been taxed at 25 percent since October.
Industry executives in Europe and the United States are on tenterhooks awaiting each new announcement from trade authorities.
“It has become abundantly clear that tariffs on distilled spirits products are causing rough seas on both sides of the Atlantic,” the Distilled Spirits Council of the United States said in a statement Friday.
The council called on authorities to withdraw 25 percent taxes on American whiskeys in the EU, and 25 percent taxes on liquors imported from five European countries, pointing to fears of a negative impact on the US economy and jobs.
But Trump, a real estate developer turned politician, sees tariffs as a negotiating tool.
After a trade war with China that lasted nearly two years and featured punishing reciprocal tariffs, Trump declared at the signing of a “phase one” trade deal with Beijing in January that it was a “momentous step ... righting the wrongs of the past.”
Airbus said the US government’s decision will hit US airlines already facing a shortage of aircraft and complicate efforts to reach a negotiated settlement with the European Union.
The European planemaker said it would continue discussions with its US customers to “mitigate effects of tariffs insofar as possible” and hoped the US Trade Representative’s office would change its position.
“USTR’s decision ignores the many submissions made by US airlines, highlighting the fact that they – and the US flying public – ultimately have to pay these tariffs,” the company said in a statement.
Trump has now turned his sights to Europe though relations remain tense as Washington brandishes the threat of taxing European auto imports, a move targeting Germany, Europe’s biggest auto exporter.
Trump wants EU member states to further open their markets to American products, particularly agricultural goods.
He has also threatened to hike tariffs on French wine — currently taxed at 25 percent — even further unless there is a deal on a digital tax which European nations want to impose on American giants such as Amazon and Facebook.


Oil slumps more than 4% on coronavirus fears

Updated 28 February 2020

Oil slumps more than 4% on coronavirus fears

  • Traders fret about impact of spreading virus on crude demand, particularly from China

LONDON: World oil prices tumbled by more than 4 percent on Thursday, as traders fretted about the impact of spreading coronavirus on crude demand, particularly from key consumer China.

Brent oil for April delivery tanked almost 4.2 percent to $51.20 per barrel, while New York’s WTI crude for the same month dived nearly 5 percent to $46.31.

“Concerns that the virus will prompt a global slowdown, weaker consumer confidence and reduced travel has raised concerns about lower demand, weighing on prices,” said CMC Markets analyst Michael Hewson.

Investors are growing increasingly fearful about the economic impact of the new coronavirus or COVID-19 outbreak. 

The virus continues to spread meanwhile, with Brazil reporting Latin America’s first case, and Denmark, Estonia, Greece, Georgia, Norway and Pakistan following suit.

Around 2,800 people have died in China and more than 80,000 have been infected. There have been more than 50 deaths and 3,600 cases in dozens of other countries, raising fears of a pandemic.

The spread of the virus to large economies including South Korea, Japan and Italy has raised concerns that growth in fuel demand will be limited. 

Consultants Facts Global Energy forecast oil demand would grow by 60,000 barrels per day in 2020, a level it called “practically zero,” due to the outbreak.

US President Donald Trump sought to assure Americans on Wednesday evening that the risk from coronavirus remained “very low,” but global equities resumed their plunge, wiping out more than $3 trillion in value this week alone.

“The negative price impact would intensify if the coronavirus were declared pandemic by the World Health Organization, something that looks imminent,” said PVM Oil Associates analyst Tamas Varga.

“The mood is gloomy and the end of the tunnel is not in sight – there is no light ahead just darkness. Not even a refreshingly positive weekly US oil report was able to lend price support.”

Gasoline stockpiles dropped by 2.7 million barrels in the week to Feb. 21 to 256.4 million, the Energy Information Administration (EIA) said on Wednesday, amid a decline in refinery throughput. Distillate inventories fell by 2.1 million barrels to 138.5 million.

US crude oil stockpiles increased by 452,000 barrels to 443.3 million barrels, the EIA said, which was less than the 2-million-barrel rise analysts had expected.

The crude market is watching for possible deeper output cuts by the Organization of the Petroleum Exporting Countries and its allies including Russia, a group known as OPEC+.

“Oil is in freefall as the magnitude of global quarantine efforts will provide severe demand destruction for the next couple of quarters,” said Edward Moya, senior market analyst at OANDA. 

“Expectations are growing for OPEC+ to deliver deeper production cuts next week.”

OPEC+ plans to meet in Vienna on March 5-6.