The U.S. widened its threat to impose tariffs against the European Union, pending the outcome of a World Trade Organization case over the EU’s subsidies of the airplane manufacturer Airbus SE, The Wall Street Journal reported.
The Office of the U.S. Trade Representative said Monday that as part of a long-running dispute over aircraft subsidies it would consider tariffs on an additional 89 items with an annual trade value of $4 billion, including cheese, pasta and Scottish and Irish whiskies as well as chemicals and metals. The U.S. in April began the process of imposing tariffs against the EU pending the resolution of a WTO case that found the aircraft manufacturer has received unfair governmental support. The EU has proposed tariffs against the U.S. over a companion case regarding U.S. subsidies of Boeing.
The announcement expands the USTR’s earlier threat, and now leaves items with a trade value of about $21 billion a year under consideration for tariffs, according to the statement. The Trump administration has largely sought to portray these tariffs as separate from their other trade efforts, saying that these tariffs are part of a distinct dispute over aviation subsidies, and not part of the overall effort to apply pressure to the EU to negotiate a broad trade deal.
The European Commission’s president, Jean-Claude Juncker, and President Trump agreed to negotiate a trade pact last summer, but the two sides have made little progress in their negotiations. Even if the Airbus-Boeing spat is largely separate from other trade issues, the threat of tariffs hasn’t been conducive to progress in those talks.
The issue between the aircraft companies, however, predates President Trump by over a decade. The EU and U.S. have been tangling before the WTO for about 15 years over dueling claims that manufacturers are unfairly subsidized. The WTO has found that both sides unfairly subsidize their aircraft and may make a decision later this year that would allow the U.S. and EU to impose tariffs as countermeasures to these unfair subsidies. The WTO will also rule on the extent of harm caused by the subsidies, which would determine the size of tariffs that would be permissible in response.
These tariffs differ from most others pursued by the Trump administration because they would be imposed in response to an official WTO ruling, rather than unilaterally initiated by Washington. The tariffs in place against China, for example, stemmed from a U.S.-initiated investigation into China’s intellectual-property practices, which provided legal justification for the administration to impose tariffs, so far, against roughly $250 billion in imports. The U.S. tariffs against global steel and aluminum imports were initiated by Washington with the official justification that steel and aluminum imports threatened U.S. national security.