Trump prepared to hit EU with more tariffs

Trump prepared to hit EU with more tariffs

The US Trade Representative (USTR) has put forward a list of products from the EU that could be subject to additional duties due to the two markets' long-running dispute over subsidies for aircraft manufacturers.

The action is in response to World Trade Organization (WTO) findings EU subsidies to Airbus have had an adverse effect on the US.

At the moment, the list is preliminary but shows the tariffs equal $11bn in trade each year. Food and drink items affected by the increase in tariffs include cheese, fish, jam and wine originating from any EU state.

The trading value between the US and the EU is more than $1 trillion annually but the EU exports more products to the US than vice versa.

The list contains a number of products in the civil aviation sector including Airbus aircraft. When the WTO arbitrator has made its report on the value of countermeasures, the USTR will issue the final product list.

US trade representative Robert Lighthizer said: "This case has been in litigation for 14 years, and the time has come for action. The Administration is preparing to respond immediately when the WTO issues its finding on the value of US countermeasures.

"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."

In 2004, the US brought a WTO challenge to EU subsidies, after failed attempts to convince the EU and four of the member states France, Germany, Spain and the UK to cease their subsidisation of Airbus.

In 2011 the WTO found that the EU provided Airbus with $18bn in subsidised financing from 1968 to 2006. It also found that European "launch aid" subsidies were vital in allowing Airbus to launch every model of its large civil aircraft; this then made Boeing lose sales of more than 300 aircraft and market share throughout the world, the US claims.

However, the WTO has also, at times, censured the US for support for Boeing.

The US threats to hit the EU with tariffs are the latest twist in rising trade tensions between the two markets. Last year, Washington imposed tariffs on EU steel and aluminum exports.

Brussels subsequently hit back with tariffs on more than $3bn worth of US exports, including on products such as orange juice and peanut butter.