The imposition of tariffs by the European Union (EU) was approved two weeks ago by the WTO arbitration body, and at Monday’s meeting the tariffs were finally approved by the Dispute Settlement Body. The US delegate to the WTO called on the EU not to introduce tariffs, as the state of Washington has already stopped illegal support for Boeing.
He also warned that the imposition of tariffs would force a reaction from the United States. According to the delegate, the administration of President Donald Trump prefers to resolve the dispute over subsidizing aircraft production through an agreement.
“The European Commission is preparing retaliatory measures (WTO-approved) in close cooperation with member states,” said European Commission Vice-President Valdis Dombrovskis, who was officially appointed EU trade commissioner this month.
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Customs duties could be imposed not only on aircraft, but also on spirits or fish
Dombrovskis added that he is still negotiating with Washington on how to resolve disputes over aircraft subsidies. “In the absence of an agreement, the EU will be ready to take action in line with the WTO ruling,” he said.
The European Union has previously drawn up a list of American products that could be targeted by new tariffs. It includes, for example, airplanes, wines, spirits, frozen fish, tractors and other products.
Long-term dispute
Disputes between the US and the EU over subsidies to aircraft production have been going on for sixteen years. Last October, the WTO allowed the United States to impose tariffs on goods from the European Union of up to $ 7.5 billion a year in retaliation for subsidizing European Airbus aircraft.
Washington then introduced a 10 percent duty on European aircraft and a 25 percent duty on other goods, such as French wines, Scotch and Irish whiskey, or cheese. This year, the United States increased tariffs on aircraft to fifteen percent.
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Dombrovskis this month called on Americans to remove tariffs. “If the US does not eliminate its tariffs, we will have no choice but to introduce our own tariffs,” he told the Financial Times.
The United States and the European Union have accused each other of illegally supporting their aircraft manufacturers Airbus and Boeing since 2004. In resolving these disputes, the WTO has found that both parties are providing financial support to their aircraft manufacturers in violation of the organization’s rules to provide them with more advantageous position on the market.
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