By William Mauldin and Josh Zumbrun 

The Trump administration sought to play down the broader significance of a new plan to impose tariffs on $11.2 billion in imports from the European Union, saying the move is part of a distinct dispute over aviation subsidies rather than an effort to apply pressure in fraught negotiations toward a possible EU trade deal.

The effort to ease tensions Tuesday comes after the U.S. trade representative's office said late Monday in a statement that it would begin a process that could end in tariffs on EU products, part of retaliation that could be allowed under a dispute at the World Trade Organization between U.S.-based Boeing Co. and Europe's Airbus SE.

"This dispute has been in litigation at the WTO for over 14 years and therefore is not tied to separate trade matters," a U.S. trade official said late Tuesday morning. "The United States and the EU have always sought to compartmentalize issues in our relationship where we can and to cooperate while we strongly promote our respective interests in WTO dispute settlement or elsewhere."

Some market participants had blamed trade jitters for at least part of a decline in U.S. stocks on Tuesday morning.

The Trump administration has previously imposed tariffs on European steel and aluminum, and President Trump has threatened similar duties on EU cars.

In a tweet greeting the aviation-related tariffs Tuesday, Mr. Trump said that "the EU has taken advantage of the U.S. on trade for many years."

The move toward potential new tariffs comes at a sensitive time, with EU officials seeking an official mandate from the bloc's member states to negotiate a trade agreement with the U.S. that would lower tariffs on a range of goods.

U.S. officials and lawmakers want the talks to include agricultural goods, hoping to boost sales of U.S. farm products to the EU market. But Mr. Trump and EU President Jean-Claude Juncker last year said the talks would focus on industrial tariffs; France and other farm-rich EU countries don't want to open up their market to competing U.S. farm goods produced in a different manner.

The timing of the move on the airplane-related tariffs suggests they could be used as leverage with the Europeans, especially given Mr. Trump's previous playbook of imposing or threatening tariffs to accelerate negotiations.

"What better time to turn up the heat using one of the president's favorite trade weapons," said Chris Krueger, of the Cowen Washington Research Group that analyzes Washington policies for investors.

Trade experts following the U.S.-EU confrontation worry that it could easily escalate, even as the Trump administration works with China to strike a deal that would end a trade war with Beijing. Still, the latest salvo is generally seen as an example of the Trump administration playing tough on trade rather than trying to sour talks between top officials.

"The trade talks are on a separate track, and I don't think how the Boeing/Airbus case plays out will make much difference," said Bill Reinsch, senior trade expert at the Center for Strategic and International Studies.

The preliminary list that the U.S. released on Monday includes about $23.8 billion in U.S. imports from the EU, so Washington would have to impose tariffs of 47% on those products -- led by aerospace goods -- to generate the $11.2 billion in tariffs it is seeking, according to an analysis from the Panjiva research group.

The amount of tariffs the U.S. will seek to levy in the aviation case is subject to arbitration at the WTO, with a decision expected this summer, the office of Robert Lighthizer, the U.S. trade representative, said Monday. "In order to act immediately when the WTO issues its findings, the administration is initiating preparations now," the U.S. trade official said Tuesday.

Write to William Mauldin at william.mauldin@wsj.com and Josh Zumbrun at Josh.Zumbrun@wsj.com

(END) Dow Jones Newswires

April 09, 2019 15:21 ET (19:21 GMT)