EU’s new trade chief presses U.S. to remove its tariffs

The European Union’s newly designated trade chief said the EU would hit American goods with tariffs as punishment for illegal aid to Boeing Co. unless the U.S. removes duties imposed as retaliation over unlawful subsidies to Airbus SE.

“We will if we will have to, but our preference would be to have an agreement with the U.S. in between where they also withdraw their tariffs,” Valdis Dombrovskis said in a Bloomberg Television interview on Tuesday in Brussels hours after being appointed EU trade commissioner.

Dombrovskis, a European Commission executive vice-president and former Latvian prime minister, is succeeding Phil Hogan of Ireland in the top EU trade job and stepping up calls for a deal to end 16 years of litigation at the World Trade Organization. Before resigning last month as a result of an Irish coronavirus controversy, Hogan repeatedly urged the U.S. to negotiate an accord on aircraft aid with the EU or face retaliatory European tariffs.

The coronavirus-induced recession this year has raised the prospect of the EU and U.S. de-escalating their aircraft-aid battle, not least because aviation has been one of the hardest-hit industries.

The U.S. targeted $7.5 billion of European goods with duties last October in WTO-authorized retaliation over unlawful support for Airbus. Armed with a $12 billion retaliation plan, the EU is waiting for the Geneva-based global trade arbiter to rule as soon as this month on the damages the bloc can seek over market-distorting state help for Boeing.

Dombrovskis said any agreement between the EU and U.S. on a “subsidies discipline” covering aircraft manufacturers could also influence “other competitors which may emerge in this area of civil aviation.”