EU set to trigger US$4 billion tariff strike on US

The European Union will impose tariffs on US$4 billion of American goods starting on Tuesday in a tit-for-tat escalation of a transatlantic fight over illegal aid to aircraft manufacturers Boeing and Airbus.

EU trade chief Valdis Dombrovskis on Monday expressed a preference to negotiate a settlement, saying the bloc would drop its duties if the US removes levies it imposed in 2019 on US$7.5 billion of EU products. Both sets of import taxes are part of a dispute that began 16 years ago.

The EU tariffs will target various Boeing models, which will face a 15 per cent duty, as well as other goods ranging from spirits and nuts to tractors and video games, which will be subject to a 25 per cent levy. The move comes at an awkward moment for the EU, which is contending with a surge of Covid-19 cases and its worst recession.

“We call on the US to agree that both sides drop existing countermeasures with immediate effect, so that we can quickly put this issue behind us,” Dombrovskis told reporters after a meeting of EU trade ministers. “Removing these tariffs would represent a strong win-win for both sides.”

The imminent tariff strike is meant to give the EU more leverage in pushing for a truce that has been elusive with US President Donald Trump, who will remain in office until January 20. The move may make it easier for President-elect Joe Biden to embrace long-standing European calls to settle the transatlantic dispute over aircraft aid at the negotiating table.