EU `regrettably' hits U.S. with tariffs, seeks better Biden ties

BRUSSELS/BERLIN • The European Union will impose tariffs on up to US$4 billion of U.S. imports in retaliation for U.S. subsidies for Boeing, but said on Monday it was hopeful of an improvement in trade ties under U.S. president-elect Joe Biden.

The move, given the green light by the World Trade Organization last month, is the latest in a 16-year U.S.-EU dispute over civil aviation subsidies. U.S. tariffs on US$7.5 billion of EU products after a parallel WTO case against Airbus have been in place for over a year.

“We have made clear at every stage that we want to settle this long-running issue,” EU Trade Commissioner Valdis Dombrovskis told a news conference after an online meeting of EU trade ministers on Monday.

“Regrettably, despite our best efforts (and) due to lack of progress on the U.S. side, we can confirm that the European Union will later today exercise our rights and impose countermeasures awarded to us by the WTO in respect to Boeing.”

From Tuesday, the EU will impose tariffs of 15 per cent on U.S. exports of planes and parts and of 25 per cent on a range products including tobacco, nuts, fruit juice, fish, spirits, bags, tractors and casino and gym equipment.

The bloc says its main objective is to persuade the United States to negotiate a solution, arguing the chief beneficiaries of the dispute are competitors such as China’s COMAC.

U.S. Trade Representative Robert Lighthizer last month warned any EU measures would “force a U.S. response,” while Donald Trump, who remains U.S. president until Jan. 20, threatened to “strike back harder.” Neither the White House nor USTR had any immediate comment Monday.

Washington could, for example, choose to hike its 15 per cent tariffs on Airbus planes, raise tariffs on products such as EU cheese, olives and whisky, or switch to other products. It argues there is no legal basis for EU measures because underlying subsidies to Boeing have been repealed.

Brussels says only the WTO can determine whether members have complied with its rulings.

Boeing called the EU decision “disappointing and surprising,” and urged Airbus and Brussels to work to resolve the trade dispute.

German Economy Minister Peter Altmaier told the news conference that many EU countries saw Biden’s election victory as a chance for an improvement in ties.

“We will try to get a new start in trade policy between the United States and all member states,” said Altmaier, whose country holds the rotating EU presidency. He said Europe’s goal was to find common ground with the future Biden administration and then reduce overall tariffs as much as possible.

The European Union and most EU states have congratulated Biden on his election victory. Trump, with whom Europe has had strained relations, is pursuing legal challenges to the outcome while making unfounded claims of fraud.