The United States will increase tariffs on European aircraft parts, some non-sparkling wines and cognac following the EU measures in November.
The Trump administration announced additional tariffs on certain EU products amid a long-standing dispute over subsidies to aircraft manufacturers Airbus SE and Boeing Co.
In November, the EU imposed duties on some $ 4 billion in US trade after obtaining approval from the World Trade Organization. A year earlier, the United States had imposed tariffs – also authorized by the WTO – on around $ 7.5 billion in imports from the EU and the UK, including wine French and Scottish whiskey.
The US Trade Representative’s office said on Wednesday it was changing some of its tariffs because the EU used a period that affected “a lot more products than would otherwise have been covered” and the EU “has to take measures to compensate for this injustice. . “
Although the United States “explained to the EU the distorting effect of the chosen period, the EU refused to change its approach,” the USTR said, leading the bureau to institute tariffs additional. The duties will include parts of aircraft manufacture, certain non-sparkling wines and certain cognacs and other grape eaux-de-vie from France and Germany, he said. The USTR did not provide a value for the additional duties, indicating that more details will be provided in a future Federal Register. Wednesday’s decision marks a new chapter in tit-for-tat transatlantic tariffs which have already seen some $ 11.5 billion in targeted trade. It comes even as the two sides say they are discussing a negotiated solution to a dispute over subsidies to large commercial aircraft that began nearly two decades ago.
“In order not to make matters worse, the United States is adjusting product coverage to less than the total amount that would be justified using the period chosen by the EU,” the USTR said. Lighthizer and his counterpart in the European Commission, Valdis Dombrovskis, have both expressed their desire for a negotiated settlement and have started discussions in recent weeks. But the latest move reflects Lighthizer’s skepticism that such a deal can be reached with less than a month in Trump’s presidency and that the EU may be keen to treat what it sees as a more accommodating Biden administration.
President-elect Joe Biden and senior advisers have expressed desire to restore trade and other relations with allies, including the EU, which have been strained by Trump’s “America First” policy .
Airbus and Boeing have both been hit hard by the pandemic and its impact on air travel. A recent surge in Covid-19 cases in Europe and the United States has also increased the likelihood of a double-dip recession in the EU and a slowing recovery in the US economy. This could prolong the suffering of the two aircraft manufacturers and increase the economic stakes for their country of origin.