Wed, Jul 17, 2019 - Page 10 News List

Europe bracing for US$7bn US tariff hit over Airbus

WAITING ON WTO:Once the world body makes a decision on damages for Europe’s aid for Airbus SE, the US administration would immediately impose the tariffs, sources said


Europe expects the WTO to give the US the green light to hit the EU with tariffs aimed at products valued at between US$5 billion and US$7 billion in a 14-year dispute over illegal aircraft subsidies, according to two European government officials.

US President Donald Trump’s administration is waiting for the WTO to give its final decision on the damages caused by prohibited European aid for Airbus SE, after which the US government would move immediately to impose the tariffs, said the officials, who asked not to be identified because the process is ongoing.

The WTO could issue its ruling as soon as this summer.

In addition to helicopters and aircraft parts, the US tariffs might also be aimed at goods such as cheese, olives and pasta — along with some types of whiskey — in what the two officials see as an effort to gain concessions from EU members to the US agricultural sector.

The measures would come on top of duties the US imposed on EU steel and aluminum exports a year ago over claims they posed a national-security threat.

The office of the US Trade Representative previously estimated the EU subsidies to Airbus cause about US$11 billion in economic harm to the US annually.

The EU has a similar case pending against Boeing Co and has already published a preliminary list of US goods — from ketchup to video-game consoles — being targeted in a US$12 billion plan for retaliatory levies.

While the EU has kept the door open to a settlement that would avoid tit-for-tat tariffs, European Commissioner for Trade Cecilia Malmstrom earlier this month signaled that she expected the duties to be imposed.

The simmering dispute threatens to push transatlantic relations to a new low and disrupt nascent negotiations launched a year ago to reach across-the-board cuts in industrial tariffs.

The EU has also said it is prepared to hit 20 billion euros (US$22.5 billion) of US goods with tariffs if Trump follows through on a threat to impose duties on European cars and car parts.

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