Trade conflicts with side effects

Authors

• Felbermayr
• G.
• Herrmann
• C.

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This study (German language) analyses the consequences of the US countervailing duties imposed due to illicit subsidies for the European joint venture Airbus. These special customs duties, which range from 15 to 25 percent, affect not only the European aircraft sector, but also and in particular the toolmaking and vehicle construction industries and producers of foodstuffs, liqueurs and brandies. Exports of German goods have dropped by around 650 million euros annually owing to these special duties. Overall, they affect a trade volume amounting to 8.4 billion euros, of which more than 20% affects German companies. For this reason, the study’s authors recommend that the European Commission urgently introduce countermeasures. They suggest financial compensation for the affected companies, with a corresponding compensation mechanism established at the EU level for state aid reasons. Countries such as the USA and China already have instruments like these, but Europe still lacks a structure to enable the offsetting of collateral damage to compa-nies that are per se completely uninvolved.

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