Abu Dhabi, UAEWednesday 19 February 2020

US imposes tariffs on EU goods including Airbus, cheese and olive oil

France warned of serious repercussions

After new tariffs, Airbus will cost 10 per cent more when imported to the US. Reuters
After new tariffs, Airbus will cost 10 per cent more when imported to the US. Reuters

The US imposed tariffs on a record $7.5 billion worth of European Union goods on Friday, despite threats of retaliation, with Airbus, French wine and Scotch whisky among the high-profile targets.

The tariffs came after talks between European officials and US trade representatives failed to win a last-minute reprieve.

The World Trade Organisation-endorsed onslaught from the US President Donald Trump also comes as Washington is mired in a trade war with China and could risk destabilising the global economy further.

In the line of fire are civilian aircraft from Britain, France, Germany and Spain - the countries that formed Airbus - which will now cost 10 per cent more when imported to the US.

But the tariffs also target consumer products such as French wine, which Trump had vowed to attack in recent months. Wine from France, Spain and Germany will now face 25 per cent tariffs.

Speaking in Washington hours before the tariffs were due to come into effect, France's Economy Minister Bruno Le Maire warned the move would have serious repercussions.

"Europe is ready to retaliate, in the framework of course of the WTO," he said after meeting with US Treasury Secretary Steven Mnuchin on the sidelines of the International Monetary Fund annual meetings.

"These decisions would have very negative consequences both from an economic and a political point of view."

Mr Maire was due to meet US Trade Representative Robert Lighthizer later on Friday.

He also warned the US against starting another front in its trade conflicts and again called for a negotiated solution.

At a time when the global economy is slowing, "I think that our responsibility is to do our best to avoid that kind of conflict," he said.

The Europeans have long advocated negotiation over conflict and they themselves will be able to impose tariffs next year to punish the US for subsidising Boeing.

As recently as Wednesday, Mr Trump singled out the Europeans for being unfair with the US on trade, but said his door was open to negotiate a settlement.

The Europeans fear above all that Mr Trump will impose heavy duties on imports of European cars around mid-November.

This would be a serious blow for the German automotive sector in particular, even if giants such as Volkswagen or BMW also manufacture in the US.

"Our products are very hard to bring in (to Europe)" when Europeans easily import their cars into the US, Mr Trump said.

Updated: October 18, 2019 10:21 AM



Most Popular