Trump administration threatens tariffs on $11bn of EU goods including wine and aeroplanes

The US is considering slapping tariffs on $11bn (£8.4bn) worth of goods from the European Union including French cheese, sparkling wine, and helicopters, it said today.

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The US Trade Representative said the proposed move would be in retaliation for EU subsidies to Airbus, the aeroplane and defence company, which the World Trade Organisation (WTO) have found to have caused adverse effects to the United States.

President Donald Trump took to Twitter to endorse the proposal, saying: “The World Trade Organization finds that the European Union subsidies to Airbus has adversely impacted the United States, which will now put Tariffs on $11 Billion of EU products! The EU has taken advantage of the U.S. on trade for many years. It will soon stop!”

The World Trade Organization finds that the European Union subsidies to Airbus has adversely impacted the United States, which will now put Tariffs on $11 Billion of EU products! The EU has taken advantage of the U.S. on trade for many years. It will soon stop!

— Donald J. Trump (@realDonaldTrump) April 9, 2019

The US said it estimates the harm from the EU subsidies to stand at $11bn per year and would retaliate accordingly. The amount is currently subject to an arbitration at the WTO which is expected to deliver a verdict in the summer.

The country's trade department released a list of items that could have tariffs applied to them which includes Swordfish steaks, olive oil, scallops, ski suits, hunting knives, and various types of wine.

US Trade Representative Robert Lighthizer said: “This case [about Airbus] has been in litigation for 14 years, and the time has come for action. The administration is preparing to respond immediately when the WTO issues its finding on the value of US countermeasures.”

“When the EU ends these harmful subsidies, the additional US duties imposed in response can be lifted,” he said.

The European Commission in response said it had started to put plans in place to retaliate over subsidies that the US allegedly provide to aeroplane company Boeing. It has already brought a case on the issue to the WTO.

A Commission spokesperson said it was “starting preparations so that the EU can promptly take action based on the arbitrator's decision on retaliation rights in this case.” The spokesperson added: “The European Union remains open for discussions with the United States, provided these are without preconditions and aim at a fair outcome.”

In response, an Airbus spokesperson said: “We don’t see any legal basis” for the US’s actions. “The amount is largely exaggerated,” he added.

“Airbus has taken the necessary measures to comply with the relatively minor elements that remained following WTO report” from May 2018, he said.

The US first brought a WTO challenge to EU subsidies for Airbus in 2004 but has not been sufficiently happy with the response of European states.

The US therefore requested authority to impose countermeasures worth $11.2bn per year, which it said made up for the adverse effects of EU subsidies. The EU challenged that estimate and a WTO arbitrator is currently evaluating the claims.

Any US tariffs would be imposed on top of existing levies that it applies to the EU. In May last year, the US cited national security grounds when it slapped a 25 per cent tariff on steel imports and a 10 per cent tariff on aluminium imports from a number of countries, including EU states.

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The move to place levies on the imports led to a row with Canada in which Prime Minister Justin Trudeau called the tariffs an “affront” to the two countries’ relationship, while EU trade commissioner Cecilia Malmstrom said it was a “bad day for world trade”.