US Threatens High Tariffs to Counter EU Aircraft Subsidies

The US government has proposed new import duties of up to 100% on a wide range of products from the European Union, as a countermeasure for sales lost by the US aerospace industry due to EU subsidies paid to Airbus, the US Trade Representative said in a notice published in the Federal Register on Friday April 12.In a preliminary list, the USTR named a variety of goods that would be subject to the duties.

The final duty amount and product list is subject to World Trade Organization (WTO) arbitration; the USTR expects those results to be released this summer.

The US first requested WTO dispute settlement consultations regarding the Airbus subsidies in 2004. European subsidies to Airbus – made by the United Kingdom, France, Germany and Spain – break those countries’ and the EU’s fair-trade commitments under WTO agreements, according to the USTR.

“The [WTO] has found repeatedly that [EU] subsidies to Airbus have caused adverse effects to the United States,” the office of the USTR said on April 8, noting that the USTR estimated the harm from the EU subsidies at $11.2 billion in trade each year. “Today, the [USTR] begins its process under Section 301 of the Trade Act of 1974 to identify products of the EU to which additional duties may be applied until the EU removes those subsidies.”

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