The United States government is threatening to put tariffs on $11.2 billion worth of EU goods to offset what it claims are unfair European subsidies for Airbus.

The World Trade Organization (WTO) says that EU subsidies to Airbus have caused “adverse effects” to the United States.

The US’ Office of the United States Trade Representative (USTR) estimates this “harm” at $11 billion in trade each year and has released a preliminary list of EU products to be covered by additional duties.

The preliminary list contains a number of products in the civil aviation sector, including Airbus aircraft.

Once the WTO arbitrator issues its report on the value of countermeasures, USTR will announce a final product list.

Ultimate goal

US Trade Representative Robert Lighthizer 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.”

Today, US President Donald Trump tweeted: “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! The EU has taken advantage of the US on trade for many years. It will soon stop!”

In parallel

The EU is engaged in a parallel row with the US over the EU’s claims that Boeing received illegal subsidies from the US government. The EU is understood to be poised to propose a list of US imports on which it will impose tariffs.

Actions taken by the Trump administration continue to affect international trade. Moves have included special duties on aluminium and steel, special duties on Chinese products, renegotiation or threatened withdrawal from NAFTA, withdrawal from the Iran sanctions programme, and proposed export controls on technology.

Watch our interview last year on this with Adrienne Braumiller, Founder & Partner of Braumiller Law Group.

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