United States plans $11bn tariffs on European aircraft, wine and cheese

United States plans $11bn tariffs on European aircraft, wine and cheese

Troy Powers
April 10, 2019

'The EU is confident that the level of countermeasures on which the notice is based is greatly exaggerated, ' a European Commission source said.

"When I see the situation global growth is in, I don't think we can afford to have a trade conflict, even if only on the specific issues of the aircraft industry in the United States and Europe", he said.

American threats to hit the European Union with tariffs come amid rising trade tensions between the bloc and President Donald Trump's White House. The new tensions may complicate those efforts, which are part of European attempts to ward off American threats of separate duties on foreign autos and vehicle parts.

"The new tariffs. are a drop in the ocean as a percentage of the overall trade between the USA and Europe and we view them as a negotiating tool to set the tone for what the really important negotiations are, namely autos", she said. "The EU is open to the US offer for dialogue in order to reach a fair solution".

The proposed tariffs are subject to public consultation in the United States and arbitration at the World Trade Organization, which is expected to deliver its findings in the summer.

Shares of Toulouse, France-based Airbus fell as much as 2.3 per cent, the biggest drop in 2 1/2 weeks, before trading 1.8 per cent lower as of 2:27 p.m.in Paris.

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The EU placed retaliatory levies on €2.8 billion worth of U.S. goods, including bourbon whiskey, motorcycles, jeans and orange juice.

The EU and the USA have been working to set in motion a limited trade pact as part of a truce agreed in July when Trump and European Commission President Jean-Claude Juncker pledged no new tariffs following those imposed on steel and aluminum. In addition it said it is considering imposing tariffs on products as diverse as swordfish, brandy and brooms from countries in the European Union. United States officials suggested that these subsidies have led to a decline in Boeing sales and lost market share across the world.

The Trump administration's list of European products to tax includes the types of helicopters and aircraft Airbus makes but also a wide range of European exports: famous cheeses like Stilton, Roquefort and Gouda, wines and oysters but also more obscure exports like ceramics, knives and pajamas.

"In the parallel Boeing dispute, the determination of European Union retaliation rights is also coming closer and the European Union will request the WTO-appointed arbitrator to determine the EU's retaliation rights", the Commission source said, adding the Commission was preparing so that it could take action after the arbitrator's decision. European Commission finds the USA proposal "greatly exaggerated" and is preparing its own list of products, which, likewise, include large commercial aircraft (hint: Boeing) and parts, Reuters reported on April 9, 2019, quoting a "source" inside the Commission.

The EU has argued the Boeing has benefited from similar government support.