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EU Set To Impose Tariffs On $4bn Of US Goods This Week

Published on Nov 9 2020 8:22 AM in Supply Chain

EU Set To Impose Tariffs On $4bn Of US Goods This Week

The European Union is poised to move this week to impose tariffs on $4 billion of US imports in retaliation for US subsidies for planemaker Boeing, EU diplomats said.

A majority of EU governments have backed imposing the widely expected tariffs once EU trade ministers meet today – the latest twist in a transatlantic trade saga that has spanned 16 years and four US presidents.

Democratic presidential candidate Joe Biden was named as the winner of the US election at the weekend, but Republican Trump would remain president until January 20 and has plenty of leeway to increase US tariffs on Europe that were imposed in a parallel case over subsidies for Airbus.

'Strike Back Harder'

US Trade Representative Robert Lighthizer last month warned any EU tariffs would "force a US response" and Trump has threatened to "strike back harder"..

Brussels views its own tariffs - authorised by the World Trade Organization last month - as important leverage in negotiations to end a dispute that began in 2004.

"I would expect the tariffs to be imposed next Tuesday or Wednesday," an EU diplomat said.

In October 2019, Washington imposed tariffs on Airbus planes and other European products from cheese to olives and single-malt whisky. Combined, the two cases represent the world's largest ever corporate trade dispute.

Washington argues there is no legal basis for EU tariffs because underlying subsidies to Boeing have been repealed. European officials argue it is only the WTO that can decide on compliance and that last month's green light stands.

Both sides accuse the other of failing to obey WTO rulings but are seen as determined to maximise their positions ahead of probable negotiations.

Tariffs will hit US planes and parts, fruits, nuts and other farm produce, orange juice, some spirits and other goods from construction equipment to casino tables, diplomats said.

The United States is authorised to impose tariffs on $7.5 billion of European goods, but has not used the whole quota. It could raise duties on various goods or expand the target list.

Whiskey Concerns

Chris Swonger, president and CEO of the Distilled Spirits Council of the US, said any EU tariffs on spirits would further devastate an industry that has already seen a 41% drop in US whiskey exports to Europe due to previous EU tariffs.

European producers have voiced similar complaints about U.S. tariffs. Politicians on both sides of the Atlantic are under mounting pressure to prevent the aircraft feud hurting other industries.

New EU tariffs will also hand Britain, which left the bloc this year, delicate decisions about whether to join neighbours in imposing tariffs at a time when it is caught between trade negotiations with both the United States and EU.

Britain, a partner of France-based Airbus, has pledged to "keep all options open".

News by Reuters edited by Donna Ahern, Checkout. Click subscribe to sign up for the Checkout print edition.

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