US Threatens To Slap New Tariffs On EU Goods In Retaliation Against Airbus Subsidies

Visitors inspect a model Airbus SE A380 aircraft in an exhibition center at the aircraft maker's factory in Toulouse, France, on Wednesday, March 20, 2019.  Photographer: Balint Porneczi/Bloomberg via Getty Images

Bloomberg | Bloomberg | Getty Images

Visitors inspect a model Airbus SE A380 aircraft in an exhibition center at the aircraft maker's factory in Toulouse, France, on Wednesday, March 20, 2019.  Photographer: Balint Porneczi/Bloomberg via Getty Images

The U.S. Trade Representative on Monday proposed a list of European Union products ranging from large commercial aircraft and parts to dairy products and wine on which to slap tariffs as retaliation for European aircraft subsidies.

With the move, the USTR said it was kicking off the process for retaliation against over $11 billion worth of damage from EU subsidies to Airbus that the World Trade Organization has found cause "adverse effects" to the United States.

The European Union and the United States have been battling for more than a decade over mutual claims of illegal aid to plane giants Boeing and Airbus, with parallel cases at the WTO. Both sides have been caught paying billions of dollars of subsidies to gain advantage in the global jet business.

The move by the USTR marks an escalation of tensions as the United States seeks to slap hefty tariffs on a range of EU products. The EU has left most of its subsidies unchanged and launched additional aid since the challenge, USTR said.

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

The WTO said last year it would evaluate a U.S. request to slap billions of dollars worth of sanctions on European products in response to a ruling that the EU had doled out the illegal subsidies to the aircraft giant.

The United States has estimated the value of those subsidies worth $11.2 billion in trade, though the EU has challenged that estimate.

The USTR said it would announce a final product list after a WTO arbiter evaluates the claims. The result is expected this summer, the statement said.

RECENT NEWS

Stocks Rise After Better-than-expected Jobs Report To Close Out Winning Week

Stocks rose on Thursday following a better-than-expected U.S. jobs report as the economy tries to recover from the coron... Read more

Record Jobs Gain Of 4.8 Million In June Smashes Expectations; Unemployment Rate Falls To 11.1%

Another big contributor to the decline of the jobless rate was a plunge in those on temporary layoff. That total fell by... Read more

17.6 Million Unemployed Americans Probably Won't Return To Their Pre-pandemic Jobs

The share of the workforce currently out of work with no reasonable chance of returning to their jobs is about 11%, or a... Read more

GM, Fiat Chrysler U.S. Auto Sales Tank In Second Quarter As Coronavirus Saps Demand

U.S. vehicle sales in the second quarter for General Motors, Toyota Motor and Fiat Chrysler plunged by more than 30% Read more

Mortgage Demand Falls For The Second Straight Week, Signaling A Potential Slowdown In The Housing Recovery

The surge in mortgage demand from homebuyers over the past two months appears to be waning, even as mortgage rates conti... Read more

Fed's Bullard Warns Of Financial Crisis Risks As Virus Cases Spike, FT Reports

St. Louis Federal Reserve Bank president James Bullard has warned that a growing number of bankruptcies due to the coron... Read more