US says considering new taxes on $3.1 bn in European products

Washington (AFP)

The United States is considering levying taxes on an additional $3.1 billion in European imports amid a dispute over subsidies to planemaker Airbus.

A document released Tuesday from the US Trade Representative (USTR) listed products from France, Germany, Spain or Britain, ranging from olives to decaffeinated coffee, as possibly subject to the new tariffs.

Washington and Brussels have been squabbling for years over government subsidies to Airbus, and in 2019 the World Trade Organization authorized the US to impose up to 100 percent in taxes on $7.5 billion in European goods
Washington and Brussels have been squabbling for years over government subsidies to Airbus, and in 2019 the World Trade Organization authorized the US to impose up to 100 percent in taxes on $7.5 billion in European goods Lionel BONAVENTURE AFP/File

Washington and Brussels have been squabbling for years over government subsidies to Airbus, and in 2019 the World Trade Organization authorized the US to impose up to 100 percent in taxes on $7.5 billion in European goods.

The EU has threatened its own tariffs on Boeing, but in an April letter to USTR Robert Lighthizer, EU Trade Commissioner Phil Hogan said he saw the coronavirus pandemic as an opportunity to defuse the tensions.

In a statement on Wednesday, a spokesman for the European Commission called the proposed measures “very damaging” and potentially beyond what the WTO ruling authorizes.

“This is particularly the case as companies are now trying to overcome the economic difficulties in the aftermath of the COVID-19 crisis,” the spokesman said.

“By potentially targeting new products, the US is increasing this damaging impact due to the cost of new disruptions to supply chains for the product potentially subject to new duties.”

President Donald Trump, who faces a tough re-election battle in November, took office promising to close the yawning US trade deficit with the rest of the world.

The skirmishes with Europe began when Trump imposed tariffs on steel and aluminum imports from the EU.

Brussels shot back by taxing iconic US products, including denim jeans and motorcycles.

Trump has also threatened duties on European cars, which is of particular concern to Germany.

He has so far backed down under the pressure from US lawmakers, but raised the idea again this month as possible retaliation for EU duties on imported lobster.

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