The Latest on the World Trade Organization’s ruling over EU’s Airbus subsidies (all times local):
The Trump administration says it plans to impose tariffs on goods from the European Union on Oct. 18 after receiving a green light Wednesday from the World Trade Organization in a case involving EU subsidies to Airbus.
The Office of the U.S. Trade Representative is expected to publish a target list of EU goods to be affected later Wednesday or Thursday. But a senior administration official, who spoke on condition of anonymity, said the administration plans to hit EU aircraft with 10% import taxes and other products with 25% tariffs.
Earlier, the administration published a list of potential targets that had included wine, cheese, olives and whiskey.
Boeing says Europe can avoid up to $7.5 billion pf U.S. tariffs authorized by the World Trade Organization by bringing European aircraft manufacturer Airbus into compliance with WTO rules.
The American plane-maker said in a statement that the prospect of tariffs has only arisen because Airbus “has refused for years to comply with WTO rulings.”
It said Airbus’s “non-compliance will negatively impact European Member States, industries, and businesses completely unrelated to Airbus’s actions, as well as Airbus’s airline customers.”
However, Boeing said that “even today, Airbus could still completely avoid these tariffs by coming into full compliance with its obligations. We hope it will finally do that.”
German Chancellor Angela Merkel says the World Trade Organization’s ruling allowing Washington to take the punitive action over the illegal EU aid to Airbus will be a burden for the aircraft maker.
The WTO ruling earlier cleared the U.S. to impose tariffs on up to $7.5 billion worth of goods from the European Union over EU subsidies for Airbus.
Merkel told reporters in Berlin that “we have lost a matter under WTO law.” The German chancellor has been one of the strongest defenders of WTO rules, even as the EU has suffered a defeat in its battle with the U.S. over Airbus aid.
Merkel said “this means it’s not some sort of arbitrary question but a verdict according to international law that now weighs on Airbus, one must sadly say.”
She added that “we have to see how the Americans will react now.”
Boeing competitor Airbus says the Trump administration would only hurt the United States if it slaps tariffs on the EU over its illegal financial support to the European aircraft manufacturer.
Airbus CEO Guillaume Faury said following the World Trade Organization’s ruling that the Trump administration can slap up to $7.5 billion-worth of tariffs on EU products would have a “negative impact” on U.S. airlines as well as U.S. jobs, suppliers, and air travelers.
He says “the entire global industry will be harmed.”
Faury says “close to 40%” of Airbus’ aircraft-related procurement comes from U.S. suppliers, supporting “275,000 American jobs in 40 states through spending that has totaled $50 billion in the last three years alone.”
The European Union’s top trade official says the bloc would prefer to reach a settlement with the United States and avoid a tariff war over aircraft subsidies but that it will respond should President Donald Trump impose new duties on EU products.
After the World Trade Organization cleared Trump to take action over illegal EU subsidies to plane-maker Airbus, EU Trade Commissioner Cecilia Malmstrom said “our readiness to find a fair settlement remains unchanged.”
But Malmstrom warned that “if the U.S. decides to impose WTO authorized countermeasures, it will be pushing the EU into a situation where we will have no other option than to do the same.”
The EU expects a similar WTO ruling on U.S. subsidies to Boeing in coming months.
Malmstrom says a tariff war “would only inflict damage on businesses and citizens on both sides of the Atlantic, and harm global trade and the broader aviation industry at a sensitive time.”
The World Trade Organization says the United States can impose tariffs on up to $7.5 billion worth of goods from the European Union as retaliation for illegal subsidies to European plane-maker Airbus — a record award from the trade body.
The move green-lights the Trump administration to slap countermeasures on the 28-member bloc and follows a WTO ruling in May 2018 on the Airbus subsidies.
Wednesday’s award doesn’t end the long-running trans-Atlantic dispute over aircraft: WTO arbitrators are expected to rule next year on how much the EU can impose in tariffs following a separate decision that went against Boeing.
The U.S. has already announced plans to impose tariffs on EU cheeses, olives, whiskey, as well as aircraft and aircraft parts. Wednesday’s decision may require fine-tuning of that list.
The European Union is appealing to U.S. President Donald Trump to avoid any tit-for-tat tariff war as world trade’s governing body prepares to issue a ruling that could allow him to impose billions in duties on EU produce.
The World Trade Organization ruled in May that Europe illegally subsidized planemaker Airbus, hurting U.S. competitor Boeing. The EU won a similar WTO case accusing the U.S. of illegally subsidizing Boeing, but a ruling allowing possible retaliation is still months off.
European Commission spokeswoman Mina Andreeva said Wednesday that “we should avoid imposing tariffs on one another.”
She says “we are still ready and willing to find a fair settlement, but if the U.S. decides to impose authorized countermeasures, the EU will do the same.”