The proposed measures are relatively minor compared with the U.S.’s ongoing trade war with China, in which the two sides have imposed tariffs on about $360 billion of each other’s goods in the past nine months. But they mark a significant escalation in tensions with the EU, which has implemented retaliatory duties on 2.8 billion euros ($3.2 billion) of U.S. imports following Trump’s trade restrictions on foreign steel and aluminum.
Some EU members, led by France, are already skeptical of the value of negotiations with the U.S., which were agreed to last July in a bid by the EU to avoid auto tariffs Trump has threatened. Furthermore, a draft of the mandate seen by Bloomberg specifically gives the EU an opt-out if the U.S. were to impose new tariffs on the bloc.
“It’s in the interests of the U.S. and the EU to find a friendly accord on the issue of penalties in the airplane sector,” French Finance Minister Bruno Le Maire told reporters in Paris on Tuesday. “When I see slowing world growth, I don’t think that we can afford a trade war, even if it’s just in one industrial sector.”
Robert Lighthizer, the U.S. trade representative, said in a statement on Monday night that the U.S. had lost patience with what is now one of the WTO’s longest running sagas.
“This case has been in litigation for 14 years, and the time has come for action,” he said in the statement.
Yet he also signaled that the administration wanted to see an end to the EU subsidies in question, which Boeing and the U.S. claim give Airbus an unfair advantage in the highly competitive passenger aircraft market internationally.
“Our ultimate goal is to reach an agreement with the EU to end all WTO-inconsistent subsidies to large civil aircraft,” he said. “When the EU ends these harmful subsidies, the additional U.S. duties imposed in response can be lifted.”
In a statement, Boeing said the company “supports the U.S. trade representative and his team in their ongoing efforts to level the playing field in the global aircraft marketplace.”
The proposed tariffs come nearly 15 years after the U.S. first complained to the WTO that Airbus had widely benefited from billions of dollars in illegal subsidies. A countersuit by the EU is still winding its way through the trade court, which found last month that about $325 million in tax incentives offered by Washington state to Boeing were unlawful.
This article provided by Bloomberg News.