The U.S. Trade Representative on Monday proposed a list of EU products ranging from large commercial aircraft and parts to dairy products and wine on which to add tariffs as retaliation for European aircraft subsidies, Reuters informs.
With the move, the USTR said it was kicking off the process for retaliation against over $11 billion worth of damage from EU subsidies to Airbus that the World Trade Organization has found cause “adverse effects” to the United States.
The EU and the United States have been battling for more than a decade over mutual claims of illegal aid to plane giants Boeing and Airbus, with parallel cases at the WTO. Both sides have been caught paying billions of dollars of subsidies to gain advantage in the global jet business, Reuters adds.
The latest move marks an escalation of tensions as Washington seeks to slap hefty tariffs on a range of EU products. The EU has left most of its subsidies unchanged and launched additional aid since the challenge, USTR said.
“Our ultimate goal is to reach an agreement with the EU to end all WTO-inconsistent subsidies to large civil aircraft. When the EU ends these harmful subsidies, the additional U.S. duties imposed in response can be lifted,” U.S. Trade Representative Robert Lighthizer said in the statement.
American threats to hit the EU with tariffs come amid rising trade tensions between the bloc and President Donald Trump’s White House, CNN adds.
Trump is considering whether to impose tariffs of up to 25% on European vehicle imports, a threat that has unnerved automakers in the industrial powerhouse of Germany.
The U.S. has already imposed tariffs on European steel and aluminum exports, and the EU retaliated with tariffs on more than $3 billion worth of American exports in June. The levies hit products such as motorcycles, orange juice, bourbon, peanut butter, cigarettes and denim.
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