Trump Administration Raises Duties on EU Aircraft to 15%


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The United States said on Friday it would increase the tariff rate on planes imported from the European Union to 15%, up from 10% on March 18.

The move is part of a longstanding dispute in which the United States has sought to penalize the EU for offering illegal subsidies to Airbus SE that have harmed the American aircraft manufacturer Boeing Co.

The U.S. trade representative said in his statement on Friday that he is leaving tariffs on certain other European products such as scotch and French wine at 25% and would make minor changes to the previously released product list.

The United States deploys a trade tactic known as carousel retaliation, whereby governments periodically change duties and tariffs on different groups of goods in order to increase pain and uncertainty for exporters . On October 18, Washington imposed 10% original duty on Airbus aircraft and 25% tariffs on a range of exports from European consumers, such as Spanish cheeses and olives.

The U.S. list continued to spare an Alabama Airbus factory that assembles single-aisle planes like the A320 by not hitting aircraft parts. But the higher fares will affect Airbus widebody models not assembled in the United States and will mean higher prices for these models for American airlines that have open orders.

Boeing and Airbus pushed American and European officials to try to reach a negotiated settlement.

Fifteen years ago, the United States filed a dispute against EU subsidies to Airbus, and the EU filed a counter action soon after. The WTO later decided that the United States and the EU were guilty.

The dispute ended last fall when the WTO said the United States could legally impose tariffs on $ 7.5 billion in European exports in retaliation for government assistance. illegal to Airbus. The award was the largest in the history of the WTO – nearly double the previous record of $ 4.04 billion established in 2002.

At the time, the U.S. restrained from penalizing certain luxury goods like cognac and handbags, with administration officials saying their goal in imposing these duties was to persuade the 39; EU to negotiate a settlement.

But transatlantic trade peace has proven difficult to achieve, and US officials say the openings of the EU are unacceptable.

The US trade representative subsequently launched a tariff review and requested information on whether to remove certain products from the October tariff list; increase the duties on certain products on this list up to 100%; or impose levies on additional products not included in the October list.

"The longer these disputes are not resolved, the greater the threat of tariffs to our industry," said the United States' Distilled Spirits Council in a statement on Friday. "The EU has said it may impose retaliatory duties this spring on American rum, vodka and brandy in its case parallel to the WTO concerning Boeing."

(Updates to add US assembly details, price effect in fifth paragraph)

– With the help of Kim Chipman.

To contact the journalists on this story: Bryce Baschuk in Geneva at bbaschuk2@bloomberg.net; Jenny Leonard in Washington at jleonard67@bloomberg.net; Shawn Donnan in Washington at sdonnan@bloomberg.net

To contact the editors responsible for this story: Brendan Murray at brmurray@bloomberg.net, Ana Monteiro, Margaret Collins

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