France’s Foreign Minister Jean-Yves Le Drian called for a “pause” in a trade dispute between the US and the European Union as a new wave of American tariffs on French and German products entered into force this week.

“The issue that poisons everyone is that of the price increases and taxes on steel, digital technology, Airbus and particularly our wine sector,” the minister told Journal du Dimanche, according to AFP.

“If we could quickly find a method to settle this dispute with Europe and France, that would be a step forward. It may take time but, in the meantime, we can always order a pause,” Le Drian added.

The products that were particularly hard hit by the higher tariffs that took effect on 12 January are French cognac, wine and German aeronautic components. The measure was announced by the US Trade Department at the end of last year as a retaliatory response to levies on four billion dollars worth of goods the EU had earlier imposed on American products.

After the higher tariffs entered into force, Brussels expressed its “regret” over Washington’s choice “to add further EU products to its retaliation list”.

The EU also signalled that it would be “looking forward to engaging constructively” with the upcoming Biden administration in a bid “to resolve this long-lasting dispute as part of a renewed transatlantic agenda”.

According to the estimates of the Federation of Exporters of French Wines and Spirits, the tariffs on spirits could results in more than a $1.2 billion loss in revenues for the industry this year.

Ongoing Trade Spat

Since 2004, the US has accused the European Union of providing the European aerospace giant Airbus with unfair subsidies through government loans, while Brussels maintained that Washington has itself been breaking the World Trade Organisation’s rules by providing unauthorised government financial support to its aircraft maker Boeing.

In 2005, the WTO launched an investigation into the EU’s public support for Airbus and a twin probe into Boeing’s US subsidies.

The EU-US disagreement culminated in 2019, when the WTO ruled that the EU subsidies paid to Airbus were illegal and gave the go-ahead to the US to impose countervailing duties on its trade partner. In October 2019, the US introduced custom tariffs against $7.5 bn in EU goods, with Italian and Dutch cheese, as well as wines coming from France, Spain and Germany the primary victims of the 25-percent tariff.

However, a year later, the WTO effectively allowed the EU to raise tariffs on up to $4 billion worth of imports from the US after ruling out that the United States was providing illegal subsidies to Boeing. In November 2020, the EU followed the call by slapping its transatlantic partner with billions-in new tariffs, something the US trade authorities called “unfair”.

The office of the US Trade Representative vowed to respond to the measure by adding a number of new products and certain brands of French and German wine and cognac to its list of goods subject to 25-percent duties.

Meanwhile, in early January, the trade authorities decided to postpone imposing another wave of levies, which were announced last summer, on $1.3 billion in French products, including on cosmetic brands and designer bags. The decision came as the US Trade Representative’s office was elaborating a response to France’s adoption of a digital service tax, which the US found threatening to its own companies.

Shoppers are being hit by delays and extra fees of up to £5 on fashion items shipped from the EU.

Top retailers including & Other Stories, Asics, Sezane and Goodhood have blamed Brexit for the delivery chaos, with hold-ups lasting days or even weeks.

In some cases, parcels with the wrong documentation are being returned to sender when they reach the border. The main cause of the delays is understood to be new paperwork and extra customs and border security arrangements.

Under new rules, anyone sending parcels from the EU to the UK needs to fill in forms including proof of origin and the reason for sending the package.

Retailers selling to Britain now have to pay customs duties and fill out declaration forms, as well as registering for VAT in the UK. VAT relief on imported goods under £15 has also been abolished.

The import headaches come as shops see a spike in online orders while Britain is in lockdown.

Problems are being compounded by high levels of sickness among postal workers due to Covid.

Meanwhile, some retailers and delivery firms are charging fees to cover the cost of the extra red tape. Parisian fashion brand Sezane told customers that ‘due to Brexit’ all UK orders will be charged a £5 admin fee. 

Courier firm TNT is slapping £4.31 on all shipments to and from the EU, rival UPS is charging £4.50 per package and DHL is insisting on €5 per shipment. DPD, which said one in five parcels had been returned because of paperwork issues, is charging £3.50 on packages to cover ‘clearance, handling, and processing costs’. It is unclear whether such costs will be passed on to shoppers.

& Other Stories, which is owned by Swedish fashion giant H&M, admitted it had suffered delays ‘for a limited period’ because of Brexit. Asics and Goodhood also warned online customers about Brexit hold-ups. 

A senior retail source said: ‘Some European retailers have clearly said it’s too much hassle to deliver to the UK and slapped big delivery charges on posting to us.’

James Hookham, of the Global Shippers Forum, said: ‘These delays will diminish in time as familiarity breeds content with the process, or contempt at the new prices.

‘But everyone is in novice mode at the moment so delays are inevitable for a while as the new arrangements bed down.’ Catherine Shuttleworth, of retail specialists Savvy Marketing, said delays could mean opportunities for UK-based brands to ‘steal shopper share.’

One could almost hear the collective sighs of relief from Brussels and the capitals of the major European Union (EU) countries Saturday over the election of a new chairman of German Chancellor Angela Merkel’s CDU (conservative) party.

On the second ballot at a virtual party conference, Armin Laschet, governor of Germany’s most populous state and a close ally of Merkel, won by a vote of 522-466 over conservative Friedrich Merz — no friend of Merkel or the EU.

Nigel Farage, father of the United Kingdom’s “Brexit” initiative and easily Europe’s best known Euroskeptic, spoke for many on the right in Europe following the vote of the CDU.

“Merz as leader would have believed in the free market and not Brussels’ dictates,” Farage told Newsmax.

Of Laschet, who now looms large as Merkel’s successor as chancellor when she steps down later this year, Farage said without hesitation: “Germany now has a weak pro-EU leader and the block of European Union nations will continue to fall behind the rest of the world.”

A onetime floor leader of the CDU in the Bundestag (parliament), Merz, 65, was an arch-rival of Merkel in her successful campaign to lead the party and become chancellor 16 years ago. In recent years, he has served as chairman of BlackRock Germany and become a millionaire several times over.

Merz made no secret of his desire to move the CDU from the centrist party it has become under Merkel to being a home for “goodwill, traditional conservatives” who is recent years have been “self-radicalizing” and moving to the more conservative Alternative for Germany (AFD) Party.

“I’m skeptical about transferring more powers to the European Union,” Merz said in a recent debate among the candidates for CDU leadership, “I don’t want to see an EU in which our identity dissolves and we’re all just Europeans.”

In contrast, North Rhine-Westphalia Gov. Laschet, 59, has been a longtime EU cheerleader in his other capacity as chairman of the Bundestag’s Foreign Affairs Committee.

Throughout the campaign, he closely identified himself with Merkel and told reporters recently: “The CDU must convey the idea that the 16 years when [Merkel] was chancellor were good years, and that we stand by her policies.”

Going back to when it was West Germany before it united with the former Communist East Germany in 1991, Germany has been ruled by the CDU for 50 of the past 70 years.

John Gizzi is chief political columnist and White House correspondent for Newsmax.