Abu Dhabi, UAEMonday 19 August 2019

Trump threatens tariffs on EU imports like helicopters and cheese

US says harm is being caused by EU subsidies to Boeing rival Airbus

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

President Donald Trump’s administration is proposing tariffs on new passenger helicopters, various cheeses and wines, ski-suits and certain motorcycles in response to harm the US says is being caused by European Union subsidies to Boeing rival Airbus.

In issuing the list, which includes many other items, the US Trade Representative’s office cited the World Trade Organization’s finding that the aid to Airbus has “repeatedly” caused “adverse effects to the United States”, the USTR said in a statement Monday evening.

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

The threatened tariffs on some $11 billion (Dh40.39bn) in imports from the EU 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 Mr Trump himself has assailed.

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

The US said it would impose the tariffs 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 to begin talks on industrial tariffs with the Trump administration.

The latest threat may therefore further complicate those talks. Some EU members, led by France, are already skeptical of the value of negotiations with the US, which were agreed to last July in a bid by the EU to avoid auto tariffs Mr Trump has threatened.

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

“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 Boeing and the US claim give Airbus 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 US duties imposed in response can be lifted.”

In a statement, Boeing said the company “supports the US 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 US first complained to the WTO that Airbus had widely benefited from billions of dollars in illegal subsidies. A countersuit by the European Union 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.

Updated: April 9, 2019 09:59 AM

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