Wed, Jul 03, 2019 - Page 10 News List

US threatens EU with more tariffs over subsidies

AIRCRAFT DOWNDRAFT:The USTR has added 89 sub-categories to a tariff list released in April as part of a decades-old fight over airplane maker subsidies


Just days after reaching a truce in the US-China trade war, the US government on Monday ratcheted up pressure on Europe in a long-running dispute over aircraft subsidies, threatening tariffs on US$4 billion of additional EU goods.

The US Trade Representative’s (USTR) office released a list of additional products — including olives, Italian cheese and Scotch whiskey — that could be hit with tariffs, on top of products worth US$21 billion that were announced in April.

The USTR said it was adding 89 tariff sub-categories to its initial list, including a variety of metals, in response to public comments, but gave no further explanation.

More than 40 individuals testified about products included on the initial list at a public hearing on May 15 and 16.

The US and the EU have threatened to impose billions of dollars of tit-for-tat tariffs on planes, tractors and food in a nearly 15-year dispute at the WTO over aircraft subsidies given to US planemaker Boeing Co and its European rival, Airbus SE.

Senior officials from Boeing and a US aerospace trade group last month urged the US government to narrowly tailor any tariffs imposed on the EU over illegal aircraft subsidies to avoid harming US manufacturers.

The Distilled Spirits Council of the United States criticized US President Donald Trump administration’s latest tariff threats and warned they would jeopardize US jobs and hurt consumers.

“We strongly oppose the inclusion of distilled products in the proposed retaliation list,” spokeswoman Lisa Hawkins said.

“US companies — from farmers to suppliers to retailers — are already being negatively impacted by the imposition of retaliatory tariffs by key trading partners on certain US distilled spirits ... and these additional tariffs will only inflict further harm,” she said.

Monday’s move followed news during the Paris Air Show that the US could be open to negotiations on an “enforceable mechanism” that could allow Airbus to receive government funding on commercial terms, potentially paving the way for an end to the aircraft subsidy fight.

Such a deal would also include moves by the US to address tax incentives provided by Washington state to Boeing and make them compliant with trade rulings, as part of a possible new framework for aircraft industry funding, two US sources said at the time.

The USTR said it would hold a hearing on the proposed additional products on Aug. 5.

It said it could immediately impose increased duties on the products included in the initial list, if the WTO arbitrator issued a decision before the public comment period ended on the supplemental list.

Further actions on the supplemental list could follow, it added.

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