The United States wants to impose tariffs for 11.2 billion dollars of EU goods – from airplanes to Gouda cheese to olives – to compensate for the unjust European subsidies for the aircraft manufacturer Airbus.
US President Donald Trump reiterated the intent with a tweet on Tuesday morning, claiming that the EU took advantage of the United States.
"The World Trade Organization believes that the subsidies of the European Union to Airbus have had a negative impact on the United States, which will now put the tariffs on $ 11 billion of EU products!", He wrote on Twitter.
The European Union. began preparations for retaliation, an E.U. the official told Reuters Tuesday. Airbus told Reuters that it did not see any legal basis for the US move and warned to investigate transatlantic trade tensions.
While the size of the tariffs are reduced compared to the hundreds of billions of US and Chinese dollars that are taxing in their trade war, they suggest a break of the talks with the European Union on trade at a time when the economy is already slowing down abruptly. The United States and the EU are negotiating from last year on how to avoid the tariffs that President Donald Trump wanted to impose to reduce a trade deficit with countries like Germany.
At the end of Monday, the Office of the US Commercial Representative released a list of EU products that it would tax in anticipation of a ruling from the World Trade Organization this summer.
In 2004 the United States had complained to the WTO, which sets the rules for trade and settle disputes, that the EU was providing unjustified support to Airbus. The WTO established last May that the EU had indeed provided some illegal subsidies to Airbus, injuring the US manufacturer Boeing.
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The United States is predicting that the WTO will say this summer that it can take countermeasures to compensate for EU subsidies. He will now start a consultation with industry representatives on the EU assets list that he wants to tax so he can have a ready list.
"This case has been in litigation for 14 years, and the time has come for action," said US representative Robert Lighthizer.
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The move, although nominally following the rules of international trade, also seems to reflect the frustration of the United States at the slowness of trade talks with the EU.
Trump in June last year imposed 25% tariffs on steel imports and 10% on aluminum imported from the EU. The EU has responded with tariffs for about 2.8 billion euros (3.4 billion dollars) of US steel, agricultural products and other products, from Harley Davidson bicycles to orange juice.
Since July, the United States and the European Union have been negotiating to reduce tariffs, with Trump supporting the biggest threat of slapping European car tariffs – a huge industry in the region – in case the negotiations did not produce a result. US officials have repeatedly expressed their frustration at the slow pace of talks.
The US announcement also comes at a time when Boeing is facing broad challenges on the global basis of its 737 Max commercial jet, amid concerns that technical problems may have contributed to two crashes in five months. In a separate case, the WTO also established that Boeing was receiving a small amount of illegal support from the state of Washington worth about $ 100 million a year.
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The rates of European airplanes could theoretically help Boeing and damage Airbus, whose shares had fallen by 1.5 percent on Tuesday on a day when the stock exchanges were traded higher.
The announcement of the United States also comes when the Chinese prime minister meets the major officials of the European Union to discuss thorny issues, including trade.
* With files from Global News and Reuters