The dispute over the aviation industry’s support for the European Union’s plans to impose tariffs on the United States and Canada is difficult to resolve next week
The European Union intends to impose tariffs on approximately $4 billion in US goods next week in retaliation for the US subsidized aircraft manufacturer Boeing.
The European Union and the United States have been fighting over aviation subsidies for 16 years. The United States accuses the European Union of illegally subsidizing Airbus and was approved to impose tariffs on US$7.5 billion of EU products last year.
EU trade ministers are scheduled to meet on the 9th. Several EU diplomats said that the governments of most EU member states support additional tariffs on US goods.
An EU diplomat who did not want to be named expected the EU to impose tariffs on US goods from the 10th or 11th.
The World Trade Organization ruled on October 13 to allow the European Union to impose tariffs on approximately $4 billion in US goods on the grounds that the United States has illegally subsidized Boeing.
U.S. goods subject to EU tariffs include airplanes and parts, fruits, nuts and other agricultural products, orange juice, some spirits and construction equipment and other products.
Reuters interpreted that the European Union regards imposing tariffs on the United States and Canada as an “important means” for negotiations on subsidies for the European and American aviation industries.
If the Democratic candidate Joe Biden wins the presidential election, he is expected to quickly repair relations with the European Union on a number of issues, and does not rule out using the US-Europe aviation industry subsidy negotiations to show a solidarity with the European Union.
The office of US Trade Representative Robert Lighthizer did not immediately respond to the EU’s latest move in imposing tariffs on US goods. He previously said that as long as the EU imposes tariffs, it “will force the US to respond.”
A senior U.S. government official told Reuters that even if President Donald Trump fails to re-elect, he will not hesitate to impose tariffs on foreign goods before the expiration of his presidency on January 20 next year.
The United States has imposed tariffs on EU products, including cheese, olives and single malt whisky, in accordance with WTO rulings from October 2019. Reuters reported that the US$7.5 billion quota has not been exhausted, and Trump has imposed sufficient “ammunition” on EU tariffs.
The US believes that the EU’s seeking to impose tariffs lacks a legal basis because the US government’s subsidy to Boeing “has been cancelled.” However, EU officials believe that only the WTO has the power to rule and that the EU can initiate tariff increases according to last month’s ruling.
Reuters reported that the EU and the United States mutually sued each other for illegal subsidies to their aircraft manufacturers, which constituted the world’s largest corporate trade dispute so far.
The additional tariffs imposed by the United States and Europe have caused complaints from both manufacturers. Chris Swanger, chairman and chief executive officer of the American Distilled Liquor Commission, said that the EU’s previous tariffs have already reduced U.S.
exports to European whiskey by 41%, and that another increase in the spirits tax rate will further hit the industry. European manufacturers also have similar complaints.