Trump’s EU slapdown: Tariffs soar after WTO finds EU illegally subsidisised plane making

The United States has said it will increase the tariff rate imposed on aircraft from Brussels to 15 percent from 10 percent on March 18. It comes as part of a long-running dispute over what Washington deems to be illegal subsidies handed to Airbus in order to help it outcompete American plane maker Boeing. In a statement, the US Trade Representative said it is also leaving duties on other European products, such as Scotch Whisky and French wine, at 25 percent.

Airbus has warned the decision to increase tariffs by Washington “further escalates trade tensions between the US and the EU”.

In a statement, the firm branded the decision “deeply” regrettable, adding it creates “more instability for US airlines that are already suffering from a shortage of aircraft.

“Airbus deeply regrets USTR’s decision to increase tariffs on aircraft imported from the EU as well as the decision to maintain tariffs on goods from other sectors.”

It added the latest move “ignores the many submissions made by US airlines, highlighting the fact that they – and the US flying public – will ultimately have to pay these tariffs”.

The European Commission has begged Washington to come to a “negotiated solution”.

The Brussels-based executive said: ‘In our view the focus now should be on finding a negotiated solution to the aircraft disputes on the basis of the concrete EU proposals for existing subsidies and future disciplines in this sector.”

Germany’s finance ministry added: “Our basic position is clear: we reject any unilateral increase in customs taxes.

“Customs taxes are ultimately harmful to everyone, including the USA.”

Last month Ursula von der Leyen, the Commission’s president, pledged to strike a deal with Washington within weeks after meeting President Trump.

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The bloc has been at loggerheads with the US for 15 years, when the country filed a dispute against the EU’s subsidies for Airbus.

The EU filed a counter-complaint shortly after, with the WTO later ruling that both the US and EU were both guilty.

Last October the WTO said the US could legally impose tariffs on £5.7 billion of European products in retaliation for illegal government subsidies to Airbus.

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Chad Bown, a senior fellow at the Peterson Institute, said: “The Trump administration’s threat of a tariff ‘carousel’ — shifting even one new product onto a list hit with new import taxes — generates even more of the uncertainty that haunts American business and workers.

“Even though there were few changes today, little was resolved, and the administration has made sure that much of that uncertainty will remain.”

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