A tariff is a tax placed only on internationally traded goods. The taxes are to be paid by the country whose good is being imported. The Administration placed a 10% tariff on aircraft imported from the European Union and 25% duty on agricultural and other products being imported. 7.5 million dollars of tariffs were imposed on a variety of goods being imported.
For Italy, the United States is their most important (non-european) trade partner with two-way trade totaling 77.875 billion dollars in 2018. The main good exported from Italy are automobiles. Alfa Romeo, Ferrari, Fiat, Lamborghini, and Maserati are a few of the well known car companies manufacturing cars in Italy.
But why are these tariffs being implemented?
The implementation of these tariffs are a result of the World Trade Organization, allowing the United States to recuperate damages from the European Union unfair subsidies to the aircraft maker Airbus. Airbus is a european aircraft company based in Britain, Germany, and France. The Italian government finds it unfair that goods being exported from Italy are being subject to tax when they were not involved in the production of the airbus.
The WTO ( World Trade Organization) has recently found that Airbus and its rival Boeing have received billions of dollars in subsidies. So, how is this fair to the Italian government?
What's Italy’s Response to the Tariffs?
During the visit of the Italian President Sergio Mattarella to the White House on October 18th, he asked United States President Donald Trump to ease up on the tariffs being placed on Italian exports. Trump responded to this request by saying that maybe the United States government was a bit harsh on the Italian government, and that was not their intent.
The president said he valued the partnership the United States has with Italy, and he will look into the tariffs being placed on Italian products.
Will these tariffs cause the United States and Italy to lose their close relationship?