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U.S. Tariffs Hit $7.5bn of EU Goods Over Illegal Airbus Subsidies

The Trump Administration has announced that it will impose additional tariffs of 25% on more than 150 goods from European Union (EU) countries, effective October 18.  Additional 10% tariffs will also be imposed on new aircraft from the United Kingdom, France, Germany, and Spain.

The announcement came after the World Trade Organization (WTO) ruled that the U.S. can impose tariffs on $7.5 billion worth of European goods over illegal subsidies to Airbus, the largest penalty in WTO history.  The WTO has also found that Boeing, Airbus’s U.S. rival, received billions of dollars of illegal subsidies, but has yet to decide on measures the EU can take in response.

“For years, Europe has been providing massive subsidies to Airbus that have seriously injured the U.S. aerospace industry and our workers.  Finally, after 15 years of litigation, the WTO has confirmed that the United States is entitled to impose countermeasures in response to the EU’s illegal subsidies,” U.S. Trade Representative Robert Lighthizer said in a statement.

The Office of the U.S. Trade Representative (USTR) released a list of hundreds of European products that will be subject to the new tariffs, including:

  • Sweaters, performance outerwear, suits, pajamas, blankets and bed linens from the UK
  • Single-malt Irish and Scotch whiskies from the UK, and wines, liquors, and cordials from Germany, Italy, Spain, Ireland and the UK
  • Olives from France, Spain, Germany and the UK
  • Certain cheese, fruit, pork, seafood, dairy products, and other agricultural goods from most EU member countries
  • Axes, pliers, screwdrivers, knives, hand tools, metal cutting shears, pipe cutters, and welding equipment from Germany
  • Self-propelled machinery from Germany or the UK
  • Printed books, pictures, and lithographs from Germany or the UK

To view the full list of goods impacted by the tariffs, click here.

Some products spared from the list originally proposed include, chocolate, sparkling wine, stemware, tiles, Italian wine, pasta, and olive oil, Greek olive oil, and frozen fish.

On Thursday, the French government announced it will respond with “retaliatory measures” on the new tariffs.  “We’ve tried to lessen this commercial tension, but if they are not in the mood for conciliation, obviously Europe will fight back,” French government spokeswoman Sibeth Ndiaye told reporters.

The USTR’s Office said it would “continually re-evaluate these tariffs based on our discussion with the EU” and expects to enter into talks in an effort to resolve the 15-year corporate dispute.  “We expect to enter into negotiations with the European Union aimed at resolving this issue in a way that will benefit American workers,” Lighthizer went on to say.

 

 

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Sources:

    • STR Trade Report, S. to Hike Tariffs on EU Goods in Aircraft Subsidy Case Beginning Oct. 18
    • Reuters, S. hits Scotch whisky, Italian cheese, French wine with 25% tariffs
    • The Loadstar, US tariffs hit $7.5bn of EU goods: a ‘lose-lose’ situation
    • Independent, US places tariffs on $7.5bn of EU goods over illegal Airbus subsidies
    • The Hill, EU to respond with ‘retaliatory’ tariffs against US

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