US to hike tariffs on Airbus planes

US to hike tariffs on Airbus planes

Levy will rise to 15% from 10%, as Airbus warns that higher EU tariffs on Boeing planes are likely soon

The United States imposed punitive taxes on $7.5 billion in European products after the WTO gave Washington a green light to take retaliatory trade measures against the EU over its subsidies to the European aerospace giant Airbus. (AFP Photo)
The United States imposed punitive taxes on $7.5 billion in European products after the WTO gave Washington a green light to take retaliatory trade measures against the EU over its subsidies to the European aerospace giant Airbus. (AFP Photo)

WASHINGTON: The United States is increasing tariffs on Airbus planes imported from Europe to 15% beginning March 18, authorities announced on Friday.

The duties have been at 10% since October, when Washington hit $7.5 billion in European products with tariffs.

The announcement from the office of the US Trade Representative came just days after President Donald Trump said it was time to talk “very seriously” about a trade deal with the European Union.

Airbus said on Saturday that it “deeply regretted” the US decision, which it said would hurt American airlines and their customers.

It also said it hoped Washington would change its position once the World Trade Organization (WTO) authorises the EU to impose tariffs on Boeing aircraft, including the 737 Max, 787 and 777 aircraft in May or June.

The Airbus complaint to the WTO estimates damages at $12 billion per year resulting from what the company claims were effectively US subsidies to Boeing for the development of its passenger jets.

Washington imposed punitive taxes on the $7.5 billion in European products after the WTO gave the United States a green light to take retaliatory trade measures against the EU over its subsidies to Airbus.

Other products — including wine, cheese, coffee and olives — have been taxed at 25% since October.

Industry executives in Europe and the United States are on tenterhooks awaiting each new announcement from trade authorities.

“It has become abundantly clear that tariffs on distilled spirits products are causing rough seas on both sides of the Atlantic,” the Distilled Spirits Council of the United States said in a statement Friday.

The council called on authorities to withdraw 25% taxes on American whiskeys in the EU, and 25 percent taxes on liquors imported from five European countries, pointing to fears of a negative impact on the US economy and jobs.

But Trump sees tariffs as a negotiating tool.

After a trade war with China that lasted nearly two years and featured punishing reciprocal tariffs, Trump declared at the signing of a “phase one” trade deal with Beijing in January that it was a “momentous step … righting the wrongs of the past”.

He has now turned his sights to Europe though relations remain tense as Washington brandishes the threat of taxing European auto imports, a move targeting Germany, Europe’s biggest auto exporter.

Trump wants EU member states to further open their markets to American products, particularly agricultural goods.

He has also threatened to hike tariffs on French wine — currently taxed at 25% — even further unless there is a deal on a digital tax which European nations want to impose on American giants such as Amazon and Facebook.


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