US extends tariff war with EU to planes, cheese and whisky
04 Oct 2019
The United States on Wednesday said it would slap 10 per cent tariffs on European-made Airbus aircraft and 25 per cent duties on French wine, Scotch and Irish whiskies, and cheese from across the continent in a retaliatory measure against illegal EU aircraft subsidies.
The announcement came after the World Trade Organisation (WTO) gave Washington a green light to impose tariffs on $7.5 billion worth of EU goods annually in the long-running case.
U.S. President Donald Trump said Thursday a World Trade Organisation decision allowing US tariffs on European Union goods in retaliation for subsidies to airline maker Airbus is a "nice victory."
In January 2009 the United States also requested consultations regarding certain EU measures that prohibit the import of poultry meat and poultry meat products that have been processed with chemical treatments designed to reduce the amount of microbes on poultry meat.
The decision announced Wednesday gives the United States approval to impose tariffs on $7.5 billion worth of EU goods, which are due to begin 18 October.
"For years, Europe has been providing massive subsidies to Airbus that have seriously injured the US aerospace industry and our workers," US Trade Representative Robert Lighthizer said.
"Finally, after 15 years of litigation, the WTO has confirmed the United States is entitled to impose countermeasures in response to the EU's illegal subsidies."
The WTO has also found the United States provided illegal subsidies to US-based airline manufacturer Boeing. A ruling on what tariffs the European Union can impose against US goods is expected next year.
The US trade representative’s target list for EU tariffs, set to take effect on 18 October, includes large Airbus planes made in France, Britain, Germany and Spain - the four Airbus consortium countries. But no tariffs will be imposed on EU-made aircraft parts used in Airbus’ Alabama assembly operations or those used by rival US planemaker Boeing Co, safeguarding US manufacturing jobs.
The United States brought the EU before the WTO in 2004, accusing Britain, France, Germany and Spain of giving illegal subsidies and grants to Airbus, making its commercial jets much cheaper on the global market than its US rival Boeing.
The USTR says it plans to open talks with the EU "aimed at resolving this issue in a way that will benefit American workers."
The size and scope of the tariffs were reduced considerably from a $25 billion list floated by Washington earlier this year that included helicopters, major aircraft components, seafood, luxury goods and other big-ticket categories that were excluded from Wednesday’s announcement.
“The U.S. has the authority to increase the tariffs at any time, or change the products affected. USTR will continually re-evaluate these tariffs based on our discussions with the EU,” the USTR said.
The USTR also sought WTO ratification of its tariff list by 14 October. The duties could come into force just three days after a scheduled 15 October tariff increase on $250 billion worth of Chinese goods, to 30 percent from 25 per cent.