International

EU threatens escalation in tariff fight over Boeing and Airbus subsidies

BBC – The EU says it will act “decisively” if the US goes ahead with a threat to put new tariffs on its goods.

It is latest twist in a long-running row with Washington over subsidies granted to the planemaker Airbus.

For more than a decade, the EU and US have accused each other of propping up their home aviation markets with tax breaks, research grants and other aid.

Last month, the US threatened duties on EU goods such as beer, gin and olives, escalating the row.

On Monday, Europe’s trade commissioner Phil Hogan said Washington had rejected moves to settle the dispute.

“I want to reassure people that we are ready to act decisively and strongly on the European Union side if we don’t get the type of outcome that we expect from the United States in relationship to finalising this 15-year-old dispute,” he told the European Parliament’s trade committee.

The World Trade Organization (WTO) has already ruled that subsidies given by the EU to Airbus in 2004 were illegal.

However, it is also considering a parallel case involving illegal support for US aerospace firm Boeing, which could see the EU impose duties on Washington later this year.

In line with the WTO ruling, the US last year imposed tariffs of 15-25% on $7.5bn (£6bn) worth of European goods.

But in June, the US said it was considering new taxes on additional EU trade worth $3.1bn annually – a move described as excessive by Brussels.

On Monday, Mr Hogan also criticised recent national security investigations launched by the US against EU goods, suggesting they may also be a form of retaliation.

The investigations, known as 232 investigations, cover products from transformers and mobile cranes to steel nails.

“It’s not appreciated the number of 232 investigations that have been launched in recent weeks, perhaps this is political, perhaps it’s more real,” Mr Hogan said.

“This is totally unacceptable,” he said. “If these investigations go further, the European Union will have to stand together and act as well.”

The US is also involved in other trade spats with the EU.

Before last year’s tariffs over Airbus, the Trump administration had imposed duties on EU steel and aluminium – spurring Brussels to tax iconic US products such as denim jeans and motorcycles.

Mr Trump has also threatened duties on European cars, a particular concern to Germany.

Leave a Reply

Your email address will not be published. Required fields are marked *