International Economics: IB Economics

The US and the UK have agreed to suspend retaliatory tariffs on goods such as Scotch whisky, among other things, as they seek a resolution to the ongoing Boeing-Airbus dispute. 

This is a good thing - it's estimated that the tariffs have cost the Scotch whisky industry nearly £600m in exports, with the US representing its largest export market. 

Coronavirus isn't the only thing hobbling the global economy - the continued trade wars between the US and China, and the US and the EU, rumble on - in this case, the EU is threatening retaliatory tariffs if the US imposes tariffs of its own, in response to EU support of Airbus.

Just when you thought it couldn't get much worse... 

Naughty, naughty. The WTO have deemed that the EU have given unfair assistance to Airbus, ruling in favour of the US, and giving the green light to the US imposition of tariffs on the company. 

This case has taken seven years to reach this stage and any likely protectionist measures are likely to take another year to take effect. 

Hot on the heels of the US suspending its tariffs on UK exports, it has extended the same privilege to US goods, as the Biden administration looks to build bridges and engage with its former allies. 

There is nobody who loses from this sort of thing, other than inefficient domestic producers in both the US and the EU. 

The ongoing Airbus-Boeing dispute over the extent of state aid rumbles on, and the WTO have concluded that the EU have unfairly supported the aircraft manufacturer.

As a consequence, the US is being permitted to levy tariffs on $7.5bn worth of EU exports. Who wins? Well, no-one actually in the longer-term, especially if the EU choose to retaliate. Which it will.