BA Boeing Co

By Laurence Norman and Daniel Michaels 

BRUSSELS -- The European Union will impose tariffs on $3.99 billion of Boeing Co. jets and other U.S. goods annually as part of a long-running trade dispute, the bloc's trade chief said Monday.

The EU had delayed imposing the tariffs since the World Trade Organization ruled in the bloc's favor on Oct. 13 preferring not to proceed with tariffs before the U.S. election. Some officials had also suggested waiting until a new U.S. administration was in place in January.

EU trade officials instead decided instead to make the move -- which is likely to be seen as hostile in the U.S. -- while Mr. Trump is still president.

The tariffs will come into effect on Tuesday, EU officials said. The measures will include a 15% tariff on imports of all Boeing models, which will account for around 44% of the $4 billion in levies, an EU official said. Other goods, including some agricultural products, processed agricultural products and industrial products, will be hit with a 25% tariff.

The EU action comes after the U.S. imposed tariffs following a WTO decision in October 2019 authorizing tariffs on $7.5 billion in Airbus SE jets and other imported European products, the largest arbitration award in WTO history.

The issue was one of several trade clashes that have strained trans-Atlantic ties under the Trump administration, although the jetliner dispute stretches back nearly two decades.

The bloc still hopes for a negotiated settlement with the U.S. and will be ready to withdraw the tariffs quickly if one is found, EU Trade Commissioner Valdis Dombrovskis said Monday.

"The U.S. has imposed tariffs following the WTO ruling in the Airbus case," he said. "Now, we have a WTO ruling also in our Boeing case, allowing us to impose our tariffs and that's what we are doing."

Mr. Dombrovskis said EU officials had been in contact with the team of President-elect Joe Biden, including on trade issues.

Last year, the bloc prepared a preliminary list of U.S. products to target in retaliation, if necessary, including aircraft, chemicals, frozen fish and tobacco.

The jetliner dispute is the longest since the WTO's inception. In 2004, the U.S. took European countries to the WTO over subsidies to Airbus, and Europe responded soon after with a case against U.S. support for Boeing.

WTO rulings since then have found that both sides provided prohibited subsidies, but Europe did so to a greater extent. The WTO's October pronouncement ended years of suits and countersuits and left the two sides with the choice of negotiating a solution or fighting a protracted trade battle.

EU officials have said they are hopeful that a settlement can be negotiated with the outgoing Trump administration's trade teams. The EU has been in talks with U.S. Trade Representative Robert Ligthizer in recent days.

A solution could allow the EU and the U.S. to start on a forward-looking trade agenda once the new administration takes office, without having the Airbus-Boeing dispute pending.

Mr. Lighthizer, the top U.S. trade negotiator, said last month the EU has "no lawful basis to impose tariffs" because the subsidies for Boeing have already been repealed. He suggested the U.S. would consider retaliating if Brussels moved forward with tariffs.

"Any imposition of tariffs based on a measure that has been eliminated is plainly contrary to WTO principles and will force a U.S. response," he said.

European officials say they can levy an additional $4 billion in tariffs based on a previous finding of other U.S. violations, which would be on top of the $3.99 billion awarded last month. EU trade ministers met Monday to discuss the decision to move ahead with the tariffs.

Write to Laurence Norman at laurence.norman@wsj.com and Daniel Michaels at daniel.michaels@wsj.com

(END) Dow Jones Newswires

November 09, 2020 10:59 ET (15:59 GMT)

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