Elected officials at every level celebrated last week as the Trump administration — through the U.S. Trade Representative (USTR) — announced that airplane parts vital to Airbus in Mobile would be excluded from planned tariffs on $7.5 billion of products coming from the European Union.
Earlier this year, the USTR had included some of those component pieces on a preliminary list of potential products that could be targeted for retaliatory tariffs against the EU as part of a 15-year dispute between Airbus and its primary competitor in the aerospace industry, Boeing.
For years, Boeing has accused several European countries — namely Spain, Germany, France and the United Kingdom — of making loans and illegal subsidies to Airbus that skew international competition between the two companies and hurt the U.S. economically.
In April the World Trade Organization (WTO), which is arbitrating the dispute, found that European subsidies to Airbus have had an adverse impact on the U.S. and Boeing. Last week, the WTO gave the final authorization for the U.S. to impose tariffs on up to $7.5 billion of goods from the EU in response.
The USTR has released a list of target products, which includes a number of European cheeses, wines and meats, but also a very specific exclusion for those parts that are imported to build the two models of Airbus jets constructed at the company’s final assembly plant in Mobile.
That exclusion was very likely the result of coordinated political pressure from state, local and federal officials.
Though the U.S. has been waging this trade battle on Boeing’s behalf, deep in Trump country, Airbus is responsible for more than 1,000 local jobs, and Mobile has continued to grow as a major player in the aerospace industry due in no small part to Airbus and the suppliers it has brought to the area.
“This is a massive win for the thousands of Alabama workers connected to Airbus Mobile,” U.S. Rep. Bradley Byrne, R-Fairhope, said. “I thank President Trump for joining me in always fighting for America first. Today’s decision is a major win for the citizens of Alabama and our country.”
In addition to efforts from Byrne and others in Washington, D.C., like Sen. Richard Shelby, local and state officials have also been directly involved making the case for sparing Airbus Mobile from the brunt of the new EU tariffs that are scheduled to officially go into effect Oct. 18.
In May Mobile Mayor Sandy Stimpson and other officials traveled to the nation’s capital to testify before a WTO subcommittee about the impact Airbus has had on Mobile and what the imposition of major tariffs on the parts needed to build planes here would mean for the Port City.
Stimpson made the argument that, no matter where it’s headquartered, Airbus in Mobile is “American workers building American products, paying American taxes and raising American families.”
“If you know anything about Alabama, you know we’re in the SEC [Southeastern Conference] and we love championship football — we love to compete and we love to win,” Stimpson said. “All we’re asking for is a fair playing field, and with all due respect to our friends in the Pacific Northwest, jobs in Mobile, Alabama, are just as important as the jobs in Seattle, Washington.”
City spokesperson George Talbot said the Airbus tariff exemption was “very positive news” that would “strengthen the business case for building aircraft in Mobile.” He also said it likely prevented a spike in the cost of production that would have had a “devastating effect” on the local aerospace industry.
Even with the exemption, some in aerospace and other local industries remain concerned about the pending dispute with the EU and Boeing as well as the Trump administration’s “trade war” mentality.
Sam Fisher, a retired professor of political science at the University of South Alabama, said backing Boeing while offsetting the effects felt by its competitor’s only U.S. manufacturing facility is in line with Trump’s history of playing both sides of trade disputes.
“Waiving the tariffs on material used to build Airbus planes in Mobile doesn’t make rational sense if you are trying to protect Boeing, but then nothing is rational when it comes to Trump’s policies,” Fisher said. “Agriculture has seen a significant decline because of tariffs, though here, Trump is offsetting the economic loss by providing government funding. Yet, that hasn’t helped smaller farmers who’ve gone out of business. The whole tearing up of trade treaties and imposing tariffs has a symbolic appeal to his base, but the reality is U.S. consumers are paying the cost of those tariffs.”
The EU has already vowed to impose retaliatory tariffs on American goods and is waiting on the WTO to rule on its own complaint against U.S. support for Boeing. It’s also unclear how tariffs on non-Airbus specific parts might affect Mobile’s final assembly plant and its network of suppliers.
Kristi Tucker, a spokesperson for Airbus Alabama, said the local plant doesn’t appear to be impacted in the short term, but in the long run, it’s unclear how the effects of the ongoing trade dispute will be.
“The USTR included aircraft components on an earlier list of European goods that might be tariffed, and could impose tariffs on other goods in the future — possibly including components destined for Airbus Mobile,” she said. “The only real resolution to this long-running dispute is through a settlement agreement, and we are hopeful that the U.S. and EU will sit down and negotiate one quickly.”
Judith Adams, a spokesperson for the Alabama State Port Authority (ASPA), said it doesn’t appear that imports coming into the local port will be majorly impacted based on the list of tariff targets the USTR has identified so far. However, she said ASPA always has concerns about “protracted trade wars.”
“There are no winners in trade wars. It drives up costs, and retaliatory tariffs impact exports and create the potential market loss,” Adams said. “Those tariffs still remain, too. Our grain business is not looking good at all this year. China is the largest consumer of U.S. grain. Farmers are feeling that squeeze.”
This page is available to subscribers. Click here to sign in or get access.
It looks like you are opening this page from the Facebook App. This article needs to be opened in the browser.
iOS: Tap the three dots in the top right, then tap on "Open in Safari".
Android: Tap the Settings icon (it looks like three horizontal lines), then tap App Settings, then toggle the "Open links externally" setting to On (it should turn from gray to blue).