[London / Brussels / Washington 2nd Reuters]-The United States announced on the 2nd that it will trigger retaliation on the 18th for imports from the European Union. The World Trade Organization (WTO) has approved that the US will impose retaliatory tariffs on the equivalent of US $ 7.5 billion for European products on the issue of subsidies for the aircraft giant Airbus <AIR.PA> by the EU on the same day. The EU is also considering retaliation, and trade friction between the US and Europe is expected to intensify.
According to an announcement by the US Trade Representative (USTR), retaliatory tariffs will add 10% to aircraft and 25% to other industrial goods and agricultural products such as wine and cheese.
There are hundreds of items, but there are many items that are limited to the country of origin, including French wine, Italian cheese, Scotch whiskey, German camera parts, and British wool products.
The WTO subcommittee, which allowed it to impose retaliatory duties, pointed out that the US suffered $ 7.5 billion in annual damage from the European government's subsidies for the Airbus ultra-large passenger aircraft A380.
The European Commission criticizes US retaliation measures as “myopic and unproductive”. Airbus also criticized that the world would enter a trade war without a winner, with a statement stating that “not only the aviation industry but the entire global economy would become unstable and cause great disruption”. The company also stressed that it contributes to the US economy through assembly plants in the United States and the employment of 4,000 people.
US specialty food importers have urged the Trump administration not to trigger tariffs. According to trade associations, in addition to 14,000 specialty food stores in the United States, more than 20,000 other food retailers are affected by tariffs.
The US and the EU have been fighting over the illegality of Airbus and Boeing subsidies since 2004 and have filed suits with the WTO. The WTO has already determined that the large subsidies for both companies are illegal.
The WTO will determine the size of EU import duties on US products early next year.
The official approval of retaliation duties will require the WTO Dispute Settlement (DSB) to formally adopt the arbitrator's report, and the process is expected to take 10 to 4 weeks. The DSB's next meeting is scheduled for October 28th, but the US called for a 14th meeting to expedite the approval process.
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