The Trump administration said it plans to levy new tariffs on European exports worth more than $7 billion, including products like wine and whiskey, following a key ruling by the World Trade Organization.
The WTO decided Wednesday the U.S. government has grounds to impose punitive taxes against certain European products, due to what the global body declared were improper subsidies given to aviation giant Airbus years ago.
The office of U.S. Trade Representative Robert Lighthizer issued a list of European products that face a 25 percent tariff, beginning this month.
The WTO ruling was the end of a 15-year effort by the U.S. government to offset subsidies given to Airbus by the governments of Britain, France, Germany and Spain. The U.S. complaint argued the subsidies were unlawful and harmed U.S. aviation rival Boeing.
“For years, Europe has been providing massive subsidies to Airbus that have seriously injured the U.S. aerospace industry and our workers,” Lighthizer said in a statement.
“Accordingly, the United States will begin applying WTO-approved tariffs on certain E.U. goods beginning Oct. 18. We expect to enter into negotiations with the European Union aimed at resolving this issue in a way that will benefit American workers.”
Airbus aircraft and parts are subject to the tariffs, along with wines and liquors and wine produced by European companies LVMH, Remy Cointreau SA, Pernod Ricard SA and Diageo PLC. Leather goods by Christian Dior SE and Hermes International are also subject to the tax — as are books, camera parts, industrial microwave ovens, sweet biscuits and waffles from Germany and Britain and some Italian foods.
Airbus chief executive officer Guillaume Faury said in an emailed statement to UPI the punitive taxes pose a “barrier to free trade” and will hurt U.S. and European consumers.
“Airbus will continue working with its U.S. partners, customers and suppliers, to address all potential consequences of such tariffs that would be a barrier against free trade and would have a negative impact on not only the U.S. airlines but also U.S. jobs, suppliers, and air travelers,” Faury said.
“Airbus is therefore hopeful that the U.S. and the EU will agree to find a negotiated solution before creating serious damage to the aviation industry as well as to trade relations and the global economy.”
The French aviation company said the tariffs will create “insecurity and disruption” to the aerospace industry and the broader global economy.
The WTO will decide soon what countermeasures are available to the European Union, which could include tariffs against Boeing products.
“The WTO has already found that the U.S. failed to address illegal subsidies causing harm to Airbus,” the company said. “This will provide the EU with grounds to claim countermeasures on U.S. products at a level that could exceed U.S. sanctions.
“The only way to prevent the negative effects of these tariff would be for the U.S. and EU to find a resolution to this long-running dispute through a negotiated settlement.”