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Trump warns EU of $11-bn tariffs over its subsidies to Boeing rival Airbus

Levies would fall on helicopters, wines and some motorcycles

Kim Chipman & Shawn Donnan | Bloomberg 

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Moves come just as the EU prepares trade talks with the US

President Donald Trump’s administration is proposing on some $11 billion in imports from the in response to harm the U.S. says is being caused by the bloc’s subsidies to Co. rival SE.

In issuing the list, which includes passenger helicopters, various cheeses and wines, ski-suits and certain motorcycles, the U.S. Trade Representative’s office cited the World Trade Organization’s finding that the aid to has “repeatedly” caused “adverse effects to the United States,” the USTR said in a statement Monday evening.

The administration said, starting Monday, it is beginning a process under Section 301 of the Trade Act of 1974 to “identify products of the to which additional duties may be applied until the removes those subsidies.”

The threatened would be implemented only after the WTO gave the final go-ahead this summer, the administration said -- a rare show of faith in an institution that himself has assailed.

The move is provocative on a number of fronts, however.

The U.S. said it would impose the under the same previously dormant trade statute that it has used to justify duties on China over the past year.

The threat also comes just as the EU’s members are in the final stages of negotiating the terms of a mandate for the European Commission, the EU’s executive arm, to begin talks on industrial tariffs with the administration.

The latest threat may therefore further complicate those talks. Some members, led by France, are already skeptical of the value of negotiations with the U.S., which were agreed to last July in a bid by the EU to avoid auto tariffs Trump has threatened. Furthermore, a draft of the mandate seen by Bloomberg specifically gives the EU an opt-out if the U.S. were to impose tariffs on the bloc using the Section 301 justification.

Robert Lighthizer, the US trade representative, said in a statement on Monday night that the U.S. had lost patience with what is now one of the WTO’s longest running sagas.

Read More: Trump Threatens Car Tariffs on Mexico, Backing Off Border Threat

“This case has been in litigation for 14 years, and the time has come for action,” he said in the statement.

Yet he also signaled that the administration wanted to see an end to the EU subsidies in question, which Co. and the U.S. claim give an unfair advantage in the highly competitive passenger aircraft market internationally.

“Our ultimate goal is to reach an agreement with the EU to end all WTO-inconsistent subsidies to large civil aircraft,” he said. “When the EU ends these harmful subsidies, the additional U.S. duties imposed in response can be lifted.”

In a statement, said the company “supports the U.S. trade representative and his team in their ongoing efforts to level the playing field in the global aircraft marketplace.”

The proposed tariffs come nearly 15 years after the U.S. first complained to the WTO that Airbus had widely benefited from billions of dollars in illegal subsidies. A countersuit by the is still winding its way through the trade court, which found last month that about $325 million in tax incentives offered by Washington state to Boeing were unlawful.

First Published: Tue, April 09 2019. 12:18 IST
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