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The US announced on Friday that it would raise the tariff on aircraft imported from the European Union from 10% on March 18 to 15%.
The move is part of a long-standing spade in which the US tried to punish the EU for offering illegal subsidies to Airbus SE that harmed American aircraft manufacturer Boeing Co.
The U.S. trade representative said in Friday’s statement that he will leave customs duties on certain other European goods such as Scottish and French wine at 25% and will make minor changes to the previously released product list.
The United States uses a trade tactic known as carousel retaliation, in which governments periodically postpone tariffs and tariffs on various commodities to increase pain and uncertainty for exporters. On October 18, Washington imposed the original 10% tariffs on Airbus aircraft and 25% on a number of European consumer exports such as cheese and Spanish olives.
The US list also saved an Alabama Airbus plant in which single-flight aircraft such as the A320 are assembled by not hitting any aircraft parts. However, the higher tariffs hit large-scale Airbus models that were not assembled in the United States and mean higher prices for models for US airlines that have orders on the books.
Both Boeing and Airbus have urged US and EU officials to find a negotiated solution.
Fifteen years ago, the United States filed a dispute over EU subsidies to Airbus, and the EU filed a counterclaim shortly thereafter. The WTO then decided that both the US and the EU were guilty.
The controversy came to a head last fall when the WTO said the US could raise US $ 7.5 billion in European exports in retaliation for illegal government aid to Airbus. The award was the largest in WTO history – almost double the previous record of $ 4.04 billion in 2002.
At the time, the United States was reluctant to punish certain luxury goods like cognac and handbags. Government officials said their goal in introducing the tariffs was to convince the EU to negotiate an agreement.
However, a transatlantic trade peace has proven elusive and US officials say the EU’s overtures were unacceptable.
The U.S. trade representative then initiated a review of its tariffs and asked for information about whether some products should be removed from the October customs list. Increase tariffs on certain items on this list by up to 100%; or levy taxes on additional products that are not included in the October list.
“The longer these disputes remain unresolved, the greater the risk of even more tariffs on our industry,” the United States Distilled Spirits Council said in a statement on Friday. “The EU has said it may raise retaliatory tariffs on US rum, vodka and brandy this spring in its WTO case on Boeing.”
(Updates to add U.S. assembly details, price effect in the fifth paragraph)
– With the support of Kim Chipman.
To contact the editors responsible for this story: Brendan Murray at [email protected], Ana Monteiro, Margaret Collins
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