Europe to impose tariffs in 16-year trade war

PARIS — The European Union said Monday that it would begin imposing sweeping tariffs on around $4 billion worth of American aircraft, food, drinks and other products beginning Tuesday, an action cleared by the World Trade Organization last month after it said Europe could retaliate against the United States for years of illegal subsidies given to Boeing.

The decision, which stems from a 16- year- old dispute before the global trade body, comes after the Trump administration last year decided to impose tariffs on as much as $ 7.5 billion in European exports annually as retaliation for what the WTO ruled were illegal subsidies given to the European airplane-maker Airbus, Boeing’s main rival.

European officials, however, say they are hoping for a settlement between the two countries that would end to the tit-for-tat tariffs once and for all, perhaps even before President Donald Trump leaves office on Jan. 20 to make way for President-elect Joe Biden, according to an EU official with knowledge of the cases who spoke on the condition of anonymity in order to discuss private negotiations.

The European tariffs include a 15% tax on large civilian aircraft and 25% on

products including chocolate, frozen orange juice, tomato ketchup, rum and vodka, video game consoles and exercise equipment. Last year, the United States imposed tariffs on European planes, wine, cheese and other items.

It remains to be seen if the European tariffs will encourage the United States to negotiate — or if they further inflame a trans-Atlantic trade spat where the Trump administration has vowed not to bend. Last month, Trump threatened retaliation if the EU went ahead with its levies.

“If they strike back, then we’ll strike back harder than they’ll strike. They don’t want to do it,” Trump told reporters.

Boeing and Airbus have taken steps to remove subsidies and fiscal support that had been deemed illegal by the WTO, opening the door to both sides entering into a negotiated settlement quickly, said the official, who was not authorized to speak publicly about the matter.