The plan follows a US threat to target $11 billion of European goods ranging from helicopters to cheeses with import duties to counter state aid to Airbus.
Sunday 14, April 2019
(Bloomberg) --The European Union (EU) is considering hitting EUR 10.2 billion ($11.5 billion) of US goods ranging from foods to helicopters with retaliatory tariffs in a dispute over subsidies to Boeing.
Both the US and EU stem from parallel, 14-year-old, disputes at the World Trade organisation (WTO) over market-distorting support for aircraft makers.
The European Commission, the EU’s executive arm, outlined its retaliation plan to trade experts from the bloc’s national governments last in Brussels.
The WTO will ultimately determine the amounts of imports that both sides would be allowed to target in the two cases. On 9 April, the commission dubbed the US aim of hitting $11 billion of imports from the EU greatly exaggerated.
The renewed transatlantic wrangling over aviation subsidies heightens EU-US trade tensions prompted by President Donald Trump’s America First protectionism, especially his controversial duties on foreign steel and aluminium based on national-security grounds and his threat to apply automotive levies on the same basis.
An escalation of transatlantic commercial tensions would in turn add risks to a global economy already suffering from Trump’s bigger trade war with China. In a Twitter post on 10 April, Trump called the EU a brutal trading partner.
So far, the EU has applied tit-for-tat tariffs on EUR 2.8 billion of American goods in response to Trump’s metal duties and threatened to hit a further EUR 20 billion of US products with levies should Washington restrict automotive imports.
To counter the threat of US duties on foreign cars and auto parts, commission President Jean-Claude Juncker reached a truce with Trump last July in which both sides pledged to work toward scaling back transatlantic market barriers including tariffs on industrial goods.
EU governments advanced that plan on 11 April when their ambassadors to the bloc gave the go-ahead for European Trade Chief Cecilia Malmstrom to negotiate cuts in industrial tariffs. The envoys also approved a mandate for her to seek deeper EU-US regulatory cooperation.