U.S. goods now face European tariffs in trade spat
WASHINGTON — The World Trade Organization on Tuesday gave the European Union permission to impose tariffs on $4 billion worth of American products annually in retaliation for subsidies given to U.S. plane-maker Boeing.
The move could result in levies on American airplanes, agricultural products and other goods.
The decision, which stems from a 16-year fight before the global trade body, follows a parallel case the United States brought against Europe over subsidies to its largest plane manufacturer, Airbus.
Last year, the Trump administration imposed tariffs on European planes, wine, cheese and other products after the WTO gave the United States permission to retaliate on up to $7.5 billion of European exports annually.
It remains to be seen whether the new tariffs ultimately will persuade the United States and Europe to come to a negotiated settlement that would lift the levies, or merely inflame relations and result in higher costs on businesses and consumers on both sides of the Atlantic.
The European Union repeatedly has appealed to the United States to remove its tariffs, but U.S. officials say Europe has not taken the necessary actions to stop its Airbus subsidies.
The tariffs will not go into effect immediately. The European Union needs to request authorization from the WTO to impose the levies, which it can do at an Oct. 26 meeting at the earliest.
The WTO’s decision Tuesday rested on a Washington state tax break provided to Boeing and worth about $100 million a year.
Legislators there repealed the tax break earlier this year with Boeing’s support, but the WTO said the subsidy nevertheless had harmed Airbus from 2012 to 2015. Airbus contends Boeing continues to receive other preferential tax treatment from the state.
In a statement, U.S. trade representative Robert Lighthizer said the European Union had no valid basis to impose tariffs, since Washington state already had repealed its tax break, and that the United States would seek more negotiations with Europe.
“Any imposition of tariffs based on a measure that has been eliminated is plainly contrary to WTO principles and will force a U.S. response,” he said. “The United States is determined to find a resolution to this dispute that addresses the massive subsidies European governments have provided to Airbus and the harm to U.S. aerospace workers and businesses.”