US to consider new tariffs on EU after WTO ruling on aircraft subsidies

The United States on Monday said that it will consider imposing new tariffs on products from the European Union (EU) after a World Trade Organisation (WTO) investigation confirmed that EU aid to Airbus has hurt the American aircraft industry.

"In light of today's report and the lack of progress in efforts to resolve this dispute, the US is initiating a process to assess increasing the tariff rates and subjecting additional EU products to the tariffs. USTR will publish a Federal Register Notice regarding that process later this week," the Office of the US Trade Representative (USTR) said in a statement.

The WTO earlier on Monday ruled that the EU has failed to abide by an order to end the illegal subsidies, which the US has previously said cost its aerospace industry about USD 7.5 billion, USTR noted.

"The WTO panel...found that European governments had extended the subsidies by renegotiating the launch aid in a way even more favourable to Airbus," USTR said.

"As a result, the panel found that the subsidies caused the Boeing 777, 787, and 747 aircraft to lose sales and market share to Airbus - sales that would have meant more revenue for US producers and jobs for US workers," the statement outlined.

This is the sixth time the WTO has found that EU subsidies to Airbus broke the organisation's rules.

On October 18, the WTO formally approved Washington's request to impose tariffs of 10 per cent on large civil aircraft and 25 per cent on agricultural and other products, with most of these tariffs being applied to imports from France, Germany, Spain, and the United Kingdom.

The dispute has been ongoing since the mid-2000s when a complaint was lodged under then-US President George W. Bush, but leaders on both sides have been reluctant to take any measures against crucial allies.

Incumbent US President Donald Trump has proved more willing to limit access to lucrative US markets and consumers in order to win more advantageous trade deals for his country.