Airbus hit as new US tariffs come into force

Trade wars aren’t about fairness, they’re about leverage.

Fairness would be no tariffs at all and no taxes that effectively act as tariffs because there’s no comparable domestic competition. Life isn’t fair though.

It's genius. French wines are consumed by a tiny portion of Americans, so it basically only affects a small slice of people who don't care if it costs a bit more.

The EU is not a country nor a federation. Companies that want to operate in EU countries need to abide by each countries laws. The EU just provide a minimum set of laws that must be abided by all countries, but that's pretty much it. Each country uses these laws as a base, and provides its own super set of laws on top.

The EU doesn't really have many tax regulations, so a country like Ireland might think "How else will I attract industry here?", and decide to allow companies to put a mailbox there in exchange for operating in the EU tax free.

This double-screws all other countries, first, because these companies pay zero taxes, so their tax contribution to the EU is zero. Second, because Ireland remains poor, because these companies pay almost zero taxes, so other countries need to send them money.

France didn't like this, so they introduced a tax that both French and non-French companies must pay (it is illegal in the EU to discriminate by country, so this tax affects French companies as well).

And that's pretty much it. This tax is high because it needs to compensate for the lack of taxes these companies pay in France, and for the money France needs to send to the tax heavens in which these companies operate.

TBH I hope other EU countries will follow France's example, and that at some point, when most countries have these rules in place to avoid getting double-screwed, the EU as a whole can agree on a set of regulations to forbid tax heavens within the EU.

Such a set of regulations needs a pretty high buy in from all EU countries (essentially unanimous consensus), and countries that cannot otherwise attract industry are incentivized to be against it.

With these new taxes, Tech companies will be more incentivized to move to the places in which it makes most physical sense for them to be, instead of a freaking mailbox in the artic. At that point, the incentive from Ireland and other tax heavens will be small, since there won't be any point for companies to move there in the first place.

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Also, while the EU usually negotiates as a front, the EU itself is a union, so it has little to absolutely no power over what any EU country does. Within the union, you have federation republics like Germany, presidental republics like France, monarchies with kings like Spain, and... without really stretching it... some EU countries aren't even democracies and are more like dictatorships. Point being, getting something done at the EU level requires widespread consensus, but the EU is extremely heterogeneous and consensus is really hard, which is why the EU gets nothing done, and why each country does whatever it wants. The EU doesn't even have a constitution.

It might be easy to criticize, e.g., the federal response to COVID in the US, but that's because people actually expected a Federal response to it, because there could have been one. In the EU, the federal response was almost non-existent, but nobody expected any because the EU has no power to do anything in this case. I don't really know whats worse.

> What's preventing the EU from being more targeted like this?

The CCP is engaged in spying on the US down to the local politics level as part of their total war strategy. Read about FangFang to see that in action.

Yawn. Sure, like any ideal. I feel like you thought this would be revelatory. There exists a spectrum, I'd like to see us lean freer. Or at least not do weird back handed crony capitalism and just come out and nationalize.