U.S. Gets Final OK to Hit EU With $7.5 Billion Airbus Sanction

The World Trade Organization on Monday formally authorized the U.S. to impose tariffs on about $7.5 billion worth of European exports annually in retaliation for illegal government aid to Airbus SE.

Members approved this month’s arbitration award — the largest in the trade body’s history — at a special meeting of the dispute settlement body at the WTO’s headquarters in Geneva. The development marks the final procedural hurdle before the U.S. can retaliate against European goods, which it plans to do on Oct. 18.

The EU made a last-ditch appeal to the U.S. over the weekend to refrain from triggering the tariffs, seeking a negotiated settlement that would avoid the economic harm a tit-for-tat escalation would cause both parties. European Trade Commissioner Cecilia Malmstrom told her U.S. counterpart, Robert Lighthizer, that his tariff plan would compel the EU to apply countermeasures in a parallel lawsuit over aid the U.S. provided to Boeing Co.

“I strongly believe that imposing additional tariffs in the two aircraft cases is not a solution,” Malmstrom said in an Oct. 11 letter to Lighthizer seen by Bloomberg News. “It would only inflict damage on businesses and put at risk jobs on both sides of the Atlantic, harm global trade and the broader aviation industry at a sensitive time.”

The office of the U.S. Trade Representative previously said it would impose a 10% tariff on large civil aircraft from France, Germany, Spain and the U.K. The U.S. will also slap 25% levies on a range of other items including Irish and Scotch whiskeys, wine, olives and cheese, as well as certain pork products, butter and yogurt from various European nations.

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