The EU hits US goods with tariffs in the Airbus-Boeing dispute

The EU hits US goods with tariffs in the Airbus-Boeing dispute

Brussels will hit US products ranging from sugar cane molasses to punitive spirits in the transatlantic dispute over aircraft subsidies, even if it looks forward to better relations after Joe Biden’s victory in the US presidential election last week.

Valdis Dombrovskis, the EU’s trade commissioner, said on Monday that Brussels would use the rights of retaliation granted by the World Trade Organization last month to target US imports into Europe with additional tariffs. The measures will take effect on Tuesday.

The WTO has authorized the EU to sell nearly $ 4 billion worth of US goods with additional tariffs in retaliation against illegal state aid to Boeing. Since last year, the US has raised additional tariffs on European products worth USD 7.5 billion in a parallel complaint against aid for Airbus. The awards were the result of 16 years of transatlantic litigation over subsidies for the sector.

Brussels said an additional 15 percent tariff would be levied on U.S. planes, while an additional 25 percent tariff would be levied on a wide range of other products, including casino tables, fitness equipment and coveted seaweed.

As is usual with such lists, the EU has tried to target sensitive products that could put pressure on politicians to resolve the dispute: Georgia, a state that was fiercely contested in the presidential elections and which will now determine Which party has the majority The US Senate is an exporter of cane molasses.

An EU diplomat warned the list would be finalized before it became clear that there would be a Senate runoff and recount in the Peach State. Other products on the list include tractors, peanuts, and orange juice.

The EU decided to withhold tariffs ahead of the US elections, but said it was doing so out of frustration at the Trump administration’s lack of progress in resolving the longstanding dispute.

“We are ready to remove our tariffs when the US removes its tariffs,” Dombrovskis told reporters after a virtual meeting of EU trade ministers at which the transatlantic relationship was discussed. He said Brussels wanted a quick de-escalation of the dispute and an agreement with the US on state aid for aircraft construction.

“We made it clear at every stage that we wanted to solve this long-term problem,” he said.

The EU was frustrated for months earlier this year as it waited for a belated WTO ruling on its rights of retaliation against state aid to Boeing, while the US was already putting additional tariffs on European products, ranging from French wine to Italian cheese.

Mr Dombrovskis said the EU is simply “mirroring” US behavior and “exercising its legal rights” but hoped that “we can quickly get out of this”.

EU diplomats said the bloc decided to move forward now that the presidential election was over and should be avoided before the inauguration day. Brussels has spent months trying to press ahead with talks with the US to end the dispute, but the European Commission said Monday that Washington “has not yet laid the groundwork for a negotiated solution” by removing its own tariffs on EU goods .

Brussels announced on the same day that EU trade ministers had expressed hopes for a better future in transatlantic trade relations following Mr Biden’s victory. Federal Minister of Economics Peter Altmaier, chairman of the video conference on Monday, said the EU would “try to achieve a fresh start with the Biden government”.

Mr Dombrovskis said key areas of cooperation with the White House would include reform of the WTO and combating climate change. He also called for the establishment of a trade and technology council between the EU and the US.