EU Braces for U.S. Tariffs Over Airbus Dispute
September 16 2019 - 12:05PM
Dow Jones News
By Emre Peker
BRUSSELS -- The U.S. is poised to impose new tariffs on European
Union exports over the bloc's subsidies to Airbus SE, the EU's
trade chief said Monday, citing the Trump administration's
unwillingness to settle a long-running commercial dispute over
aircraft manufacturers.
The EU expects the World Trade Organization will set the final
sum the U.S. is entitled to in its successful complaint as soon as
Sept. 30, EU Trade Commissioner Cecilia Malmstrom said. Washington
has said it expects to be able to impose tariffs on $11 billion in
annual EU exports.
The EU has filed its own WTO complaint against Boeing Co., but
as the U.S. began its case nine months earlier Washington will be
able to punish Europe first.
Ms. Malmstrom said that the EU proposed a settlement to the U.S.
in July, offering to also cover its WTO case against Boeing, but
that the U.S. hasn't engaged. Brussels is planning to retaliate
with duties on $12 billion of U.S. exports once the WTO issues its
decision in the Boeing case, expected early 2020.
The U.S. mission to the EU didn't immediately respond to a
request for comment.
While the final awards in the 15-year-old Airbus and Boeing
cases are likely to be lower than the U.S. and EU claims, they will
still affect billions of dollars' worth of trans-Atlantic trade. A
new round of levies could threaten EU-U.S. efforts to improve trade
relations, after President Trump's steel and aluminum duties last
year triggered European retaliation.
"We have enough tariffs in the world as it is," Ms. Malmstrom
said. "So imposing tariffs on each other...would not be a good
solution."
European negotiators presented their American counterparts with
a comprehensive proposal to regulate subsidies for the
civil-aircraft industry, which EU officials said could also serve
as the blueprint of a global framework. That would not only settle
the Boeing-Airbus feud, but also help the EU and U.S. jet-makers
compete more effectively with Russian and Chinese manufacturers
challenging their primacy, according to EU officials.
The EU suggested a plan that covers subsidies related to
research and development support, financing of large civil
aircraft, repayable launch investments that would qualify as loans,
and tax subsidies. EU officials said the proposal would cover all
the subsidies challenges and WTO rulings in the Airbus and Boeing
cases.
"We could still discipline ourselves even more, and that is what
we propose," Ms. Malmstrom said. "It would be a win-win if we did
that because otherwise we escalate tariffs."
Write to Emre Peker at emre.peker@wsj.com
(END) Dow Jones Newswires
September 16, 2019 11:50 ET (15:50 GMT)
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