Boeing Jets, Other U.S. Goods Worth $4 Billion Face EU Tariffs -- 2nd Update
10 November 2020 - 4:30AM
Dow Jones News
By Laurence Norman and Daniel Michaels
BRUSSELS -- The European Union will impose tariffs on $3.99
billion of Boeing Co. jets and other U.S. goods annually as part of
a long-running trade dispute, the bloc's trade chief said
Monday.
The EU had delayed imposing the tariffs since the World Trade
Organization ruled in the bloc's favor on Oct. 13 preferring not to
proceed with tariffs before the U.S. election. Some officials had
also suggested waiting until a new U.S. administration was in place
in January.
EU trade officials instead decided instead to make the move --
which is likely to be seen as hostile in the U. S. -- while Mr.
Trump is still president.
The tariffs will come into effect on Tuesday, EU officials said.
The measures will include a 15% tariff on imports of all Boeing
models, which will account for around 44% of the $4 billion in
levies, an EU official said. Other goods, including some
agricultural products, processed agricultural products and
industrial products, will be hit with a 25% tariff.
The EU action comes after the U.S. imposed tariffs following a
WTO decision in October 2019 authorizing tariffs on $7.5 billion in
Airbus SE jets and other imported European products, the largest
arbitration award in WTO history.
EU Trade Commissioner Valdis Dombrovskis said that, given the
U.S. decision last year to quickly impose tariffs and the fact the
new administration doesn't take office until January, the EU
decided it shouldn't wait longer to impose the tariffs.
"I think we have been very clear on all occasions that our
preference is for a negotiated settlement. So as soon as the U.S.
is willing to drop their tariffs, we are willing to drop our
tariff," Mr. Dombrovskis said in an interview.
The jetliner dispute was one of several trade clashes that have
strained trans-Atlantic ties under the Trump administration,
although the jetliner dispute stretches back nearly two
decades.
Mr. Dombrovskis said EU officials had been in contact with the
team of President-elect Joe Biden, including on trade issues but
didn't say whether they had discussed the Boeing tariffs.
Last year, the bloc prepared a preliminary list of U.S. products
to target in retaliation, if necessary, including aircraft,
chemicals, frozen fish and tobacco.
The jetliner dispute is the longest since the WTO's inception.
In 2004, the U.S. took European countries to the WTO over subsidies
to Airbus, and Europe responded soon after with a case against U.S.
support for Boeing.
WTO rulings since then have found that both sides provided
prohibited subsidies, but Europe did so to a greater extent. The
WTO's October pronouncement ended years of suits and countersuits
and left the two sides with the choice of negotiating a solution or
fighting a protracted trade battle.
An Airbus spokesman said the company welcomed the EU move.
Mr. Dombrovsksis said he is hopeful that a settlement can still
be negotiated with the outgoing Trump administration's trade teams.
The EU has been in talks with U.S. Trade Representative Robert
Ligthizer in recent days. His office, which leads the U.S. response
to the case, didn't immediately respond to a request for
comment.
Mr. Lighthizer, the top U.S. trade negotiator, said recently the
EU has "no lawful basis to impose tariffs" because the subsidies
for Boeing have already been repealed. He suggested the U.S. would
consider retaliating if Brussels moved forward with tariffs.
"Any imposition of tariffs based on a measure that has been
eliminated is plainly contrary to WTO principles and will force a
U.S. response," he said.
European officials say they can levy an additional $4 billion in
tariffs based on a previous finding of other U.S. violations, which
would be on top of the $3.99 billion awarded last month. EU trade
ministers met Monday to discuss the decision to move ahead with the
tariffs.
Mr. Dombrovskis struck a cautious note on the prospect of
relaunching broad bilateral trade talks with the incoming
administration. He said his immediate goal will be to work with the
U.S. on WTO reform and to aim for targeted bilateral deals,
including resolving trade disputes between the two sides and
striking trade facilitation agreements.
Write to Laurence Norman at laurence.norman@wsj.com and Daniel
Michaels at daniel.michaels@wsj.com
(END) Dow Jones Newswires
November 09, 2020 12:15 ET (17:15 GMT)
Copyright (c) 2020 Dow Jones & Company, Inc.
Boeing (NYSE:BA)
Historical Stock Chart
From May 2024 to Jun 2024
Boeing (NYSE:BA)
Historical Stock Chart
From Jun 2023 to Jun 2024