U.S. proposes additional tariffs on $4 bln EU products over aircraft subsidies
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U.S. President Donald Trump and European Commission President Jean-Claude Juncker deliver a joint statement on trade in Washington, July 28, 2018. /VCG Photo

U.S. President Donald Trump and European Commission President Jean-Claude Juncker deliver a joint statement on trade in Washington, July 28, 2018. /VCG Photo

Just days after reaching a truce in the U.S.-China trade war, the U.S. government on Monday ratcheted up pressure on Europe in a long-running dispute over aircraft subsidies, threatening tariffs on four billion U.S. dollars' worth of additional EU goods. 

The U.S. Trade Representative's office released a list of additional products  - including olives, Italian cheese and Scotch whisky - that could be hit with tariffs, on top of products worth 21 billion U.S. dollars that were announced in April.

USTR said it was adding 89 tariff sub-categories to its initial list, including a variety of metals, in response to public comments, but gave no further explanation. Over 40 individuals testified about products included on the initial list at a public hearing on May 15 and 16.

Products like Scotch whisky could be affected by the latest proposed U.S. tariffs. /VCG Photo

Products like Scotch whisky could be affected by the latest proposed U.S. tariffs. /VCG Photo

The United States and the EU have threatened to impose billions of dollars of tit-for-tat tariffs on planes, tractors and food in a nearly 15-year dispute at the World Trade Organization over aircraft subsidies given to U.S. planemaker Boeing and its European rival, Airbus.

Senior officials from Boeing and a U.S. aerospace trade group urged the U.S. government last month to narrowly tailor any tariffs imposed on the EU over illegal aircraft subsidies to avoid harming American manufacturers.

Monday's move followed news during the Paris Air Show that the U.S. could be open to negotiations on an "enforceable mechanism" that could allow Airbus to receive government funding on commercial terms, potentially paving the way for an end to the aircraft subsidy fight.

VCG Photo

VCG Photo

Such a deal would also include moves by the U.S. to address tax incentives provided by Washington state to Boeing and make them compliant with trade rulings, as part of a possible new framework for aircraft industry funding, two U.S. sources said at the time.

The WTO has found that the world's two largest planemakers received billions of dollars of harmful subsidies in a pair of cases marking the world's largest-ever corporate trade dispute.

It is expected to rule on the U.S. sanctions request over the summer, although the date could slip to September.

USTR said it would hold a hearing on the proposed additional products on August 5.

It said it could immediately impose increased duties on the products included in the initial list, if the WTO arbitrator issued a decision before the public comment period ended on the supplemental list.

Further actions on the supplemental list could follow, it added.

Source(s): Reuters