EU Threatens Tariffs After US Imposes 25% Duty on European Goods in WTO Aircraft Dispute
Although the U.S. is authorized to levy "prohibitive" tariffs -- up to 100 percent -- on $7.5 billion in European imports, senior U.S. trade officials say they have decided to impose 10 percent tariffs on large civil aircraft and 25 percent tariffs on some European food products, British apparel, blankets and bed linen, some Irish and Scotch whiskey, German or British hand tools, lenses, books and self-propelled heavy equipment. The tariffs will go into effect Oct. 18, the officials said, and a Federal Register notice with the details is expected Oct. 3. The USTR's full list includes more than 150 tariff lines, though some are only part of the eight-digit line.
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The World Trade Organization authorized the tariffs because the European Union's subsidies of Airbus launches harmed the U.S. by $7.5 billion annually. The EU has said it is seeking a negotiated solution to both this 15-year case, and the case that alleged Boeing was illegally subsidized by Washington state, and that those subsidies cost Airbus sales (see 1903280040).
EU Trade Commissioner Cecilia Malmström issued a statement Oct. 2, after the retaliation level was made public, that said: "The European Commission has consistently communicated to the United States that the European Union is ready to work with them on a fair and balanced solution for our respective aircraft industries." She said: "The EU has, as recently as this July, shared concrete proposals with the U.S. for a new regime on aircraft subsidies, and a way forward on existing compliance obligations on both sides. So far the U.S. has not reacted."
She said the EU's "readiness to find a fair settlement remains unchanged. But if the U.S. decides to impose WTO authorized countermeasures, it will be pushing the EU into a situation where we will have no other option than do the same." She said because the WTO will authorize retaliation over the Boeing subsidy within a few months, it would be "short-sighted and counterproductive" for the U.S. to impose tariffs now.