US proposes new tariffs on EU products over Airbus subsidies

Tue, 2019-04-09 06:05

SAN FRANCISCO: The US on Monday threatened to impose tariff
counter-measures of up to $11.2 billion on a host of European
products in response to subsidies received by aircraft maker
For more than 14 years, Washington and Brussels have accused each
other of unfairly subsidizing Boeing and Airbus, respectively, in a
tit-for-tat dispute.
In a statement Monday, the office of the US Trade Representative
(USTR) said the World Trade Organization (WTO) had repeatedly found
that European subsidies to Airbus have caused adverse effects to
the United States.
“This case has been in litigation for 14 years, and the time has
come for action,” said US Trade Representative Robert
“Our ultimate goal is to reach an agreement with the EU to end
all WTO-inconsistent subsidies to large civil aircraft. When the EU
ends these harmful subsidies, the additional US duties imposed in
response can be lifted.”
The statement added that the final amount it would seek in duties
was subject to arbitration at the WTO, the result of which was
expected in the summer.
The USTR issued a 14-page document with a preliminary list of
products being considered for additional tariffs, including
helicopters, civilian planes and aircraft parts.
It also included food products such as swordfish, salmon, cheeses,
fruits, olive oil and wines.
The Boeing-Airbus spat is the longest and most complicated dispute
dealt with by the WTO, which aims to create a level playing field
in global trade.
Both aviation giants have scored points along the way.
The WTO ruled in March 2012 that billions of dollars of subsidies
to Boeing were illegal and notified the United States to end
But a few months later, the European Union filed a new complaint,
alleging Washington was not complying with that order.
In a ruling published in June 2017, the WTO said the US had brought
28 of 29 programs into compliance, but agreed with Brussels that
Washington had not taken “appropriate steps to remove the adverse
effects or … withdraw the subsidy” in the case of Washington
The EU and the US appealed against that to the WTO Appellate Body,
which last month echoed the 2017 finding, although it appeared to
take a harsher line against the American side.
Brussels was also reprimanded by the WTO during the Airbus-Boeing
row, and the US asked the WTO to determine the amount it could
impose in sanctions against the European Union for failing to
remove subsidies.
The USTR said Monday that once that report is issued, it will
announce a full product list, which comes after months of trade
tensions between the US and the EU.
President Donald Trump’s administration has made punitive tariffs
something of a signature, imposing many and frequently threatening
them as a negotiation tactic. The EU has not been an exception.
The EU and the US have been working to set in motion a limited
trade pact as part of a truce agreed in July when Trump and
European Commission President Jean-Claude Juncker pledged no new
tariffs following those imposed on steel and aluminum.
The USTR’s statement also comes as Boeing faces a crisis over its
737 MAX aircraft, which is grounded over safety fears following two
fatal accidents.
The US plane maker said in a statement that it supports
Washington’s “ongoing efforts to level the playing field in the
global aircraft marketplace.”
“Boeing has consistently supported US compliance with WTO
rulings. It’s now time for the EU to follow that example and end
all illegal government support for Airbus.”

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Source: FS – All-News-Economy
US proposes new tariffs on EU products over Airbus subsidies