US Set to Hit EU With Tariffs Over Airbus Dispute
17 September 2019 - 12:38AM
Dow Jones News
By Emre Peker
BRUSSELS--The U.S. will soon hit the European Union with fresh
tariffs for its subsidies to Airbus SE (AIR.FR), the EU's trade
chief said Monday, citing the Trump administration's refusal to
settle a long-running commercial fight over aircraft
manufacturers.
Washington is poised to move ahead with tariffs after the World
Trade Organization determines the final sum the U.S. is entitled to
as soon as Sept. 30, EU Trade Commissioner Cecilia Malmstrom said.
The U.S. expects to hit $11 billion of annual EU exports.
The EU-proposed a settlement to the U.S. in July, offering to
also cover its WTO case against Boeing Co. (BA), but the U.S. has
not engaged, she said. Brussels is prepared to hit back with duties
on $12 billion of U.S. exports once the WTO issues its decision,
expected early 2020.
While the final awards in the 15-year-old Airbus and Boeing
cases are likely to be lower than U.S. and EU claims, they will
still hit billions of dollars' worth of trans-Atlantic trade. A new
round of levies could threaten EU-U.S. efforts to improve trade
relations, after President Trump's steel and aluminum duties last
year triggered European retaliation.
"We have enough tariffs in the world as it is," Ms. Malmstrom
said. "So imposing tariffs on each other... would not be a good
solution."
Still, the U.S. appears unwilling to negotiate until after
imposing duties on European exports, she said. Because the EU's WTO
complaint against Boeing came almost nine months after the U.S.
case versus Airbus, Washington will be able to punish Europe
first.
The U.S. mission to the EU didn't immediately respond to a
request for comment.
European negotiators presented their American counterparts with
a comprehensive proposal to regulate subsidies for the
civil-aircraft industry, which EU officials said could also serve
as the blueprint of a global framework. That would not only settle
the Boeing-Airbus feud, but also help the EU and U.S. jet-makers
compete more effectively with Russian and Chinese manufacturers
challenging their primacy, according to EU officials.
The EU suggested a plan that covers subsidies related to
research-and-development support, financing of large civil
aircraft, repayable launch investments that would qualify as loans,
and tax subsidies. EU officials said the proposal would cover all
the subsidies challenges and WTO rulings in the Airbus and Boeing
cases.
"We could still discipline ourselves even more, and that is what
we propose," Ms. Malmstrom said. "It would be a win-win if we did
that because otherwise we escalate tariffs."
Write to Emre Peker at emre.peker@wsj.com
(END) Dow Jones Newswires
September 16, 2019 10:23 ET (14:23 GMT)
Copyright (c) 2019 Dow Jones & Company, Inc.
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