On Monday, President Trump said that trade talks with China have “already begun” after his meeting with Xi Jinping at the G20 summit in Osaka late last week. Stock markets rose, the president said “farmers are going to end up being the great beneficiary” of the détente in the trade war that he started, and all appeared to be right with America’s economic relations.
It was not to last: On Monday evening, Reuters reported that the Trump administration proposed an additional $4 billion in tariffs on European Union goods to pressure the E.U. to fold in a 15-year dispute over aircraft subsidies. Among the items that the U.S. Trade Representative’s office may levy — in addition to the $21 billion of product proposed in April — are olives, Italian cheese, Scotch whiskey, and some 86 other tariff sub-categories. According to CBS New York, the cost of olive oil could double or triple if tariffs are implemented.
Industry officials in the United States weren’t thrilled about the idea. Boeing and a U.S. aerospace trade group “urged the U.S. government last month to narrowly tailor any tariffs imposed on the E.U. over illegal aircraft subsidies to avoid harming American manufacturers,” per Reuters. And the Distilled Spirits Council of the United States condemned the administration’s tariff threat as another retaliatory effort that would hurt the industry and U.S. consumers.
Already, the $4 billion threat has caused a dip in U.S. stock futures, and if implemented, it will add to the economic damage that the administration’s recent tariff spree has caused. In early June, the Washington Post estimated that the trade war with China cost $7 trillion up to that point. To help U.S. farmers over the hump, the government boosted farm aid by $28 billion, while tariffs were reportedly costing the U.S. tech sector $1.3 billion a month. And though the 5 percent tariff against all Mexican goods was called off before it was implemented, it was expected to cut 400,000 jobs from the economy.