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EU Set to Impose $4B in Tariffs on US Exports

Nov. 8, 2020
Aircraft, aircraft parts, fruits, nuts, and other goods are targeted, but the long-running case now has less to do with Airbus and Boeing subsidies, and more about the terms of trans-Atlantic trade.

The European Union reportedly is set this week to impose tariffs totaling $4 billion annually on U.S. exports of aircraft and aircraft components, as well as fruits, nuts, and other produce, orange juice, some alcoholic spirits, construction equipment, and various other products. The move, which stems from the long-running dispute over subsidies to Boeing, would follow a November 9 meeting of EU trade ministers

The EU had reserved the decision on leveling tariffs until after the recent presidential election.

In October, the World Trade Organization appellate panel authorized the EU to exercise tariffs on U.S. exports, about one year after the same body authorized the U.S. to apply tariffs on EU exports. The WTO previously had ruled that the EU had subsidized Airbus, as well as that the U.S. had subsidized Boeing. The charges in each case date to 2004.

Last October, the U.S. imposed tariffs totaling $7.5 billion on EU exports of aircraft and aircraft parts, cheeses, spirits, and a range of other products.

The U.S. Trade Representative maintains that there is no substance to the EU charges because the subsidies provided to Boeing by the State of Washington have been rescinded. The European Commission (the trade authority for the EU) has demanded an immediate suspension of U.S. tariffs, and is using its own threat of tariffs as a retaliatory tactic.

In addition, the EU move may be seen as positioning for renewed negotiations over broader EU-U.S. trade terms following the presidential election. The Trump Administration has used tariffs and other protectionist measures in its trade negotiations, while EU officials are understood to be hoping for agreement on a new trade deal with a new administration.

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