US Wants to Impose Tariffs on $11 billion worth of EU products

US Wants to Impose Tariffs on $11 billion worth of EU products

The United States is reportedly considering imposing import tariffs on almost $11 billion worth of goods that originated in the European Union. The proposition came as an answer to the subsidies Airbus has received from the EU, as they’re believed to have an adverse effect on the US.

With a very probable end in sight to the tensions between the United States and China, many experts have predicted that Washington could be entering into a full-blown trade war with the European Union.

Both the EU and the US have been preparing to impose tit-for-tat tariffs since the beginning of April, making it the biggest escalation in the fight over government aid given to Boeing and European rival Airbus that has been going on for more than 14 years.

“The World Trade Organization finds that the European Union subsidies to Airbus has adversely impacted the United States, which will now put Tariffs on $11 Billion of EU products!” US President Donald Trump tweeted. “The EU has taken advantage of the US on trade for many years. It will soon stop!”

Trump’s announcement came the morning after the office of the United States trade representative said that it was preparing a list of European products to tax as retaliation for European subsidies to Airbus, which the World Trade Organization ruled were illegal in May 2018. The investigation found that from 2004 to 2018, Airbus had received illegal funding for several of its aircraft models. The US then requested the authority to impose “retaliatory tariffs” of over $11 billion per year.

“This case has been in litigation for 14 years, and the time has come for action,” Robert Lighthizer, the United States trade representative, said in a statement. “Our ultimate goal is to reach an agreement with the E.U. to end all W.T.O.-inconsistent subsidies to large civil aircraft.”

“When the E.U. ends these harmful subsidies, the additional U.S. duties imposed in response can be lifted,” he added.

The European Commission, however, said that it considers the $11 billion in retaliatory measures to be “overblown” and not justified by any findings by the World Trade Organization. “The figure quoted by the U.S. trade representative is based on U.S. internal estimates that have not been awarded by the W.T.O.,” Daniel Rosario, a European Commission spokesman, said during a press briefing in Brussels.

The list of possible tariffs presented by the US covers a wide variety of goods – from airplanes and helicopters to sensitive agricultural products such as cheese and wine. The European Commission has also begun drawing up a list of products that would be covered by retaliatory tariffs and is currently awaiting a decision from the WTO before specifying which goods categories could be targeted.

Anthony Gardner, the former US ambassador to the EU, said imposing additional tariffs on European products would be a mistake. In an interview with CNBC, Gardner said he regrets that the U.S., under the Trump administration, has seemingly chosen to view the EU as a foe. He added that the two economies should work together even more, especially when it comes to tackling concerns about China’s trading practices.

(Banner image: Johann H. Addicks/Wikimedia Commons)

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