U.S. can tariff about $8 billion of EU goods over Airbus aid
The World Trade Organization will authorize the U.S. to impose tariffs on nearly $8 billion of European goods due to illegal state aid provided to aircraft maker Airbus, according to people familiar with the decision, a move that will likely trigger retaliatory measures from the European Union.
The U.S. duties, which could hit as soon as October, will target planes and parts as well as luxury products, such as wine and spirits like Dom Pérignon and Moet & Chandon, and leather goods under labels such as Givenchy and Louis Vuitton, according to a list published by the U.S. Trade Representative’s office.
WTO spokesman Keith Rockwell and a spokesperson for Boeing both declined requests from Bloomberg for comment.
The people who spoke of the ruling asked not to be identified because the confidential WTO decision isn’t due to be published until Monday.
The verdict marks the latest chapter in the WTO’s longestrunning dispute and will further test transatlantic relations, which have deteriorated under President Donald Trump’s “America First” strategy. And while the scope of this conflict is limited, Washington is separately mulling tariffs on auto imports, which would dramatically increase Europe’s stake in the American trade war.
The EU is pursuing a similar case at the WTO over illegal subsidies the U.S. provided to Boeing, and has published a preliminary list of U.S. goods — from ketchup to video game consoles — it will target in a $12 billion plan for retaliatory levies. A decision in that case is expected from the Geneva-based trade organization in the first half of 2020.
Boeing closed Thursday at 386.89, up $0.80, in New York, hovering near the highest intraday mark in more than five months. Airbus’ closed Thursday at 119.54 euros, down 1.17%, in Paris.
A spokesperson for the Office of the U.S. Trade Representative didn’t immediately respond to a request for comment.
The WTO award is lower than the Trump administration’s request to impose tariffs on up to $11.2 billion worth of European exports stemming from the nearly 15-year-old dispute. The U.S. hasn’t finalized which goods it will hit, but the preliminary list also includes whiskey, motorcycles, leather handbags, cheese and wine.
The new U.S. tariffs mark a significant escalation in tensions with the EU, which has implemented retaliatory duties on $3.2 billion of U.S. imports following Trump’s trade restrictions on foreign steel and aluminum.
The EU has also said it’s prepared to hit $21.8 billion of U.S. goods with tariffs if Trump follows through on the threat to impose duties on European cars and car parts.
Separately, the EU is weighing an aggressive new approach to its trade dispute with the U.S., and is considering imposing tariffs on more than $4 billion of U.S. exports, citing as justification a 22-year-old World Trade Organization dispute over prohibited subsidies, according to people familiar with the plan. This is despite the fact that the two sides reached a “mutually acceptable solution” to the claim in 2006.
European Trade Commissioner Cecilia Malmstrom said she advocated for a settlement that would avoid the tit-for-tat aircraft tariffs, but said that the U.S. never responded to the bloc’s offers.