US hit back against EU with tariff retaliation over ‘harmful’ Airbus subsidies
- US Trade Representative says it is kicking off the process for retaliation against the European Union over US$11 billion worth of damage from subsidies to Airbus
- The World Trade Organisation has found that the subsidies cause “adverse effects” to the United States
The United States has proposed a list of European Union products ranging from large commercial aircraft and parts to dairy products and wine on which to impose tariffs as retaliation for aircraft subsidies.
With the move on Monday, the US Trade Representative (USTR) said it was kicking off the process for retaliation against over US$11 billion worth of damage from European Union subsidies to Airbus that the World Trade Organisation (WTO) has found cause “adverse effects” to the United States.
The European Union and the United States have been battling for more than a decade over mutual claims of illegal aid to plane giants Boeing and Airbus, with parallel cases at the WTO. Both sides have been caught paying billions of dollars of subsidies to gain advantage in the global jet business.
The move by the USTR marks an escalation of tensions as the United States seeks to slap hefty tariffs on a range of European Union products. The European Union has left most of its subsidies unchanged and launched additional aid since the challenge, USTR said.
“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,” said US trade representative Robert Lighthizer.
The WTO said last year it would evaluate a US request to slap billions of dollars worth of sanctions on European products in response to a ruling that the EU had doled out the illegal subsidies to the aircraft giant.
The United States has estimated the value of those subsidies worth US$11.2 billion in trade, though the European Union has challenged that estimate.
The USTR said it would announce a final product list after a WTO arbiter evaluates the claims. The result is expected this summer, the statement said.