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US threatens tariffs on $11 billion of European goods over Airbus subsidies

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US threatens tariffs on $11 billion of European goods over Airbus subsidies

botchway April 10, 2019


The United States is threatening to impose tariffs on European goods worth billions of dollars, intensifying a long-running dispute over aircraft subsidies.

The United States Trade Representative proposed levies on hundreds of categories of exports on Tuesday in retaliation for the European Union allegedly providing subsidies to Airbus (EADSF).

The goods range from Airbus jets and their components to European staples like wine, cheese and frozen fish.

These exports are worth about $11 billion every year to European countries, roughly equal to the damage the United States believes the subsidies inflicts on Boeing (BA) and the US economy.

Boeing is in crisis, but it is doing just fine in its race with Airbus

“When the EU ends these harmful subsidies, the additional US duties imposed in response can be lifted,” US Trade Representative Lighthizer said in the statement.

The proposed tariffs are subject to public consultation in the United States and arbitration at the World Trade Organization, which is expected to deliver its findings in the summer.

The dispute dates back to 2004, when EU authorities said Boeing received $19 billion in unfair subsidies from federal and state governments between 1989 and 2006. The US government filed a similar claim that year over European subsidies to Airbus.

The World Trade Organization has handed down favorable rulings to both sides, underscoring the complexity of the dispute.

The trade watchdog said last month that the United States had failed to stop giving Boeing illegal tax subsidies in Washington State, but cleared it of other allegations.

It issued a similar ruling last year in the case brought by the United States over Airbus. It said Europe had breached some rules on subsidies, but dismissed other allegations.

Source: cnn.com

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