US proposes tariffs on $11 billion of EU products

US proposes tariffs on $11 billion of EU products

WASHINGTON: The US is considering to impose tariffs on about $11 billion of goods from the European Union in response to the bloc's subsidies for European aircraft manufacturer Airbus.

The US has been in litigation at the World Trade Organization (WTO) over Airbus subsidies since 2004 and said it was releasing a list of items proposed for tariffs in anticipation of a ruling soon from the WTO, the Wall Street Journal reported.

Aircraft and cheese are among the products that could be hit by tariffs, US Trade Representative (USTR) Robert Lighthizer said on Monday. The move would mark an escalation in trade tensions between the US and the EU.

The WTO found that the subsidies have an "adverse impact" on the US, reports said.

"This case has been in litigation for 14 years and the time has come for action. The administration is preparing to respond immediately when the WTO issues its finding on the value of US countermeasures," Lighthizer said in a statement.

"Our ultimate goal is to reach an agreement with the EU to end all WTO-inconsistent subsidies to large civil aircraft. When the EU ends these harmful subsidies, the additional US duties imposed in response can be lifted."

The USTR said the value of goods that would be targeted with tariffs was subject to arbitration at the WTO, the result of which is expected in a few months.

A preliminary list of goods, covering a wide range of items, has been issued for public consultation. The goods that are being considered for additional tariffs if they come from any of the 28 EU states are: Salmon fillets, lemons, olive oil, Marsala wine, ceramic household steins with pewter lids, motorcycles with an engine size of between 500cc and 700cc, among other items.

In addition, additional import duties are being considered on some goods if they are produced in France, Germany, Spain or the UK. These products include helicopters, undercarriages for use in new civil aircraft and fuselages for use in new civil airplanes, the BBC reported.

The proposed US tariffs would be imposed in addition to existing levies on European products.

In 2018, the US started charging levies on the imports of steel and aluminium from key allies including the EU.

The EU imposed retaliatory tariffs on 2.4 billion pounds worth of US goods in June on products like bourbon whiskey, motorcycles and orange juice.

US President Donald Trump in March threatened to impose tariffs on cars imported from the EU, if both sides couldn't reach a trade deal.

Washington is currently negotiating a trade deal with China, but tit-for-tat tariffs imposed by both countries have already weighed on the global economy.