Published On: Sat, Apr 13th, 2019

EU Prepares New Retaliatory Tariffs Against US

The Brussels authorities submitted to the Member States a list of US products that could be subject to additional charges. According to insiders, it includes imports worth around 20 billion euros.

New Retaliatory Tariffs

In the escalating dispute over illegal subsidies for Boeing and Airbus, the European Commission has been pushing ahead with the preparations for billions in retaliatory tariffs against the United States. According to EU officials, the Brussels authorities presented to the Member States on Friday a list of US products that could be subject to additional charges. It includes imports worth around 20 billion euros.

The Commission did not want to officially confirm the information and give no examples of products. She pointed out that a consultation process was still planned with potentially affected EU companies, and that eventually special tariffs on annual imports worth just over € 10 billion should be imposed. This corresponds to the estimated damage caused by illegal US subsidies for the aircraft manufacturer Boeing.

The basis for EU plans was laid by the World Trade Organization (WTO) Dispute Settlement Committee in Geneva on Thursday, formally confirming a ruling on illegal subsidies to US aircraft maker Boeing. The final retaliation tariffs must also be confirmed at the end by a WTO arbitrator.

Only on Monday had the US introduced plans for retaliatory duties on various imports from the EU. They are based on the fact that, according to a WTO ruling, the European aircraft manufacturer Airbus has also received billions in illegal state aid. US special duties are due annually on goods worth around $ 11 billion (€ 9.8 billion). In addition to products and components for the aviation industry, these include numerous other goods such as a number of cheeses, olive oil, oranges or seafood.

The trade dispute between Brussels and Washington could now escalate further. US President Donald Trump sees his country as the victim of unfair trade agreements and has promised his followers a strict “America First” policy. The US has already imposed punitive tariffs on steel and aluminum imports from the EU, which has already led to countermeasures. Trump has also been threatening for months to increase the barriers to entry for cars from Europe. That would especially hit German industry hard.

The EU wants to prevent car tolls and instead conclude a trade agreement with the US, which provides, among other things duty-free for industrial products. If the car duties become reality, the EU wants to react with retaliatory tariffs.

The commercial dispute between the US aircraft manufacturer Boeing and its European rival Airbus has been raging for more than 15 years. They accuse each other of having used inappropriate State aid. However, WTO dispute parties are not the companies but the US and the European Union.

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