After the WTO's big decision, America slapped tariffs on European airplanes and cheese
First rule of World Trade Organization... feel free to talk about World Trade Organization. The WTO is actually a 164-nation club of countries down to trade with each other in economic harmony. Here's what the WTO does for its members after they pay club dues:
- Set the rules: How should the buyers and sellers of stuff behave? Who pays for what? What taxes and fees are fair?
- Resolve conflicts: If two countries aren't on speaking terms because of a trade snafu, the WTO decides who was right/wrong. Apologies ensue.
- Ensure peace: Countries that trade with each other are less-likely to go to war with each other — that's the underlying purpose of the entire institution.
The WTO just decided that the US is right... Europe has been busy subsidizing Airbus, the continent's big airplane maker. Since that's not fair to America's Boeing, the WTO OK'd the US to toss $7.5B worth of tariffs on European-made Airbus planes. Delta, American, and Alaska shares all fell because they'll pay big taxes when they next buy Airbus jets.
This is how trade disputes are supposed to be handled... Only problem: it took 15 years for the WTO to reach this decision (literally). The US immediately responded by throwing taxes on goods we import from the European Union, like jets, cheese, and Irish Scotch. Expect Europe to retaliate, as trade increasingly becomes a zero-sum game soaked in politics, not economics.