Striking EU with $7.5b in tariffs

WASHINGTON: Hours after getting the green light from the World Trade Organisation, Washington moved Wednesday to retaliate against the EU over illegal subsidies for Airbus, announcing tariffs on $7.5 billion worth of European goods starting October 18. 

The ruling is the largest arbitration award in WTO history and a landmark moment in the longstanding Airbus-Boeing battle, which threatens to intensify already strained trade relations between the United States and the European Union.

The top US trade negotiator said he expects to begin talks with Brussels soon to try to resolve the dispute. But President Donald Trump hailed the decision, calling it a “big win” for the United States and claiming credit for the outcome of the 15-year-old case.

A file photo taken on September 27 at the Airbus delivery centre in Colomiers, southwestern France, shows a logo of Aircalin airline based in New Caledonia. Photo: AFP

“We’re having a lot of wins at the WTO,” Trump said. “All of those countries were ripping off the United States for many years and they know I’m wise to it.”

The EU will face tariffs of 10 percent on aircraft and 25 percent on other goods, like cheeses, whiskey and olive oil, as some industrial products, largely from the four countries that support Airbus: France, Germany, Spain and Britain.

“For years, Europe has been providing massive subsidies to Airbus that have seriously injured the US aerospace industry and our workers,” US Trade Representative Robert Lighthizer said in a statement.

“We expect to enter into negotiations with the European Union aimed at resolving this issue in a way that will benefit American workers,” he said.

Although the WTO ruling allows Washington to penalize the EU with duties of up to 100 percent, the US has limited the tariffs for now but “has the authority to increase the tariffs at any time, or change the products affected,” the statement from Lighthizer’s office said.

Brussels earlier Wednesday also indicated a willingness to negotiate.

“Our readiness to find a fair settlement remains unchanged,” the EU statement said, adding that the bloc had “shared concrete proposals with the US for a new regime on aircraft subsidies” but had not yet received a response.

US trade officials countered that they had not heard serious offers from Brussels until recent weeks when it became apparent the WTO decision was imminent.

Though the case has been wending its way through the global trade court for years, the final decision adds more fuel to the simmering disputes between the economic powers already at odds over US tariffs on steel and aluminum and the perilous threat of taxes on European autos.

The EU immediately threatened to respond to any US move with tariffs of its own.

However, a US trade official said that would be illegal under WTO rules and Washington would be prepared to respond.

The case began in 2004, over what Washington called massive corporate welfare for Airbus — a direct competitor to US aerospace firm Boeing.

It has since been mired in the WTO’s complex dispute settlement system, which allows for a range of appeals.  – AFP