EU Announces Tariffs Up to $4 Billion for U.S. Products

The European Union slaps tariffs on up to $4 billion worth of U.S. products on Monday due to America’s “lack of progress” on resolving the long-standing disputes over aircraft subsidies. The European Commission said that these tariffs would be in effect on Tuesday.

The World Trade Organization (WTO) last month made way for tariffs imposition on U.S. exports, including aircraft, during the delivery of the ruling in favor of the European Union as part of the U.S. subsidies to Boeing (B.A.) and E.U. aid to rival planemaker Airbus (EADSF).

The U.S. and E.U.’s dispute has been at odds since 2006, where WTO agreed last year that the E.U. violates Airbus aid’s best trade practices, resulting in duties of $7.5 billion of imported goods to the U.S. On Monday, EU trade chief Valdis Dombrovskis preferred a negotiation, saying the bloc would drop its duties if the U.S. removes levies imposed last year.

The E.U. tariffs will be targeting various Boeing models, facing a 15% duty, including goods ranging from video games, spirits, and nuts to tractor, subject to a 25% levy.

“We call on the U.S. to agree that both sides drop existing countermeasures with immediate effect so that we can quickly put this issue behind us. Removing these tariffs would represent a strong win-win for both sides.”
EU trade chief Valdis Dombrovskis

U.S. Trade Representative Robert Lighthizer said that the U.S. is “disappointed” with the E.U.’s action, stating that the ruling already repealed the alleged subsidy to Boeing seven months ago.

“The E.U. has long proclaimed its commitment to following WTO rules, but today’s announcement shows they do so only when convenient to them.”
U.S. Trade Representative Robert Lighthizer

Meanwhile, the E.U. also desires to end the series of trade disputes and boot up its relationship with the U.S. to prepare the new administration to take power in Washington. The decision comes soon after NBC recently projected that Joe Biden would become the next U.S. president.

Biden’s victory possibly results in a positive development in this dispute over aircraft subsidies as Dombrovskis recently congratulated him for winning the 2020 election.