Trump Administration to Raise Tariffs on EU Aircraft

Date : 02/15/2020 @ 2:06AM
Source : Dow Jones News
Stock : Boeing Co (BA)
Quote : 304.3  -13.6 (-4.28%) @ 7:29PM
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Trump Administration to Raise Tariffs on EU Aircraft

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By Josh Zumbrun 

The Trump administration said Friday it would increase tariffs on aircraft coming from the European Union, as its dispute with the bloc over subsidies for plane manufacturers remains unresolved.

Beginning March 18, airplanes from France, Germany, Spain and the U.K. will be subject to 15% tariffs, up from a 10% tariff that took effect in October.

The U.S. initially was authorized to impose the tariffs by a ruling at the World Trade Organization following a 15-year legal battle with the EU over support programs for aircraft manufacturers Airbus SE and its U.S. rival, Boeing Co.

As part of the dispute, the U.S. trade representative also imposed tariffs in October on a range of EU food products, including certain wines, cheeses and olives. Those tariffs were set in October at 25% and weren't raised on Friday. The USTR has said about $7.5 billion worth of goods are affected by the tariffs, a figure which was unchanged by the latest action.

The USTR also had said that it might change the items affected by tariffs, but it made just a small tweak Friday to its original list, removing prune juice but adding certain kitchen knives from France and Germany to the list of goods subject to a 25% tariff.

The WTO decision allowed tariffs as high as 100% to be imposed. The USTR's office had threatened a wide range of products from Europe with the maximum tariff, prompting an outcry from industries that could be affected. But the USTR opted on Friday for a more modest increase in aircraft tariffs and no change to others.

"The United States remains open to a negotiated settlement that addresses current and future subsidies to Airbus provided by the EU and certain current and former member States," the USTR said in a statement.

The actions are the latest salvo in a dispute dating back to 2004 over aircraft subsidies that has become part of the Trump administration's trade negotiations with Europe. The two sides have been in formal negotiations since 2018 over a range of trade issues but have made little progress. Talks with the EU have accelerated under a new trade commissioner but haven't led to a breakthrough on aircraft subsidies or a number of other trade issues such as steel and aluminum tariffs implemented by the Trump administration in 2018.

The WTO is expected to rule later this year on a related case brought by the EU against U.S. subsidies of Boeing. At that point, the EU will be authorized to strike back with tariffs of its own. The USTR said Friday it may still change its tariffs "immediately upon any EU imposition of additional duties on U.S. products" as part of the dispute.

Write to Josh Zumbrun at Josh.Zumbrun@wsj.com

 

(END) Dow Jones Newswires

February 14, 2020 20:51 ET (01:51 GMT)

Copyright (c) 2020 Dow Jones & Company, Inc.

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