US plans to impose tariffs on EU products after WTO ruling on aircraft subsidies
The United States plans to impose tariffs on a wide range of goods from the European Union after the World Trade Organization gave it permission to levy tariffs on US$7.5 billion of EU exports to counteract subsidies to Airbus, Office of the US Trade Representative said in a statement Wednesday.
In an arbitration decision announced earlier in the day, WTO said that the amount is commensurate with the adverse effects suffered by Airbus' US rival Boeing in terms of lost sales and impeded deliveries of its aircraft.
The United States will begin applying WTO-approved tariffs on certain EU goods beginning October 18, US Trade Representative Robert Lighthizer said in the statement, while adding that "we expect to enter into negotiations with the European Union aimed at resolving this issue."
Although USTR has the authority to apply a 100 percent tariff on affected products, at this time the tariff increases will be limited to 10 percent on large civil aircraft and 25 percent on agricultural and other products, the statement said.
Following the WTO arbitration decision, the EU released a statement quoting its Trade Commissioner Cecilia Malmstrom as saying that "we remain of the view that even if the United States obtains authorization from the WTO Dispute Settlement Body, opting for applying countermeasures now would be short-sighted and counterproductive."
"Both the EU and the US have been found at fault by the WTO dispute settlement system for continuing to provide certain unlawful subsidies to their aircraft manufacturers," the statement said, adding that "in the parallel Boeing case, the EU will in some months equally be granted rights to impose countermeasures against the US as a result of its continued failure to comply with WTO rules."
Airbus, meanwhile, said in a statement the additional tariffs are "still avoidable." Airbus is hopeful that the United States and the EU will agree to find a negotiated solution before "creating serious damage" to the aviation industry as well as to trade relations and the global economy, it said.