The European Union is set to place tariffs of up to $4 billion on a range of U.S. products in retaliation for illegal government subsidies to Boeing aircraft. The move, given the green light by the World Trade Organization last month, is the latest in a 16-year U.S.-EU dispute over civil aviation subsidies. U.S. tariffs on $7.5 billion of EU products after a parallel WTO case against Airbus have been in place for over a year.
“The countermeasures bring the EU equal footing with the U.S., with sizeable tariffs on each side based on two WTO decisions related to aircraft subsidies,” the European Commission said in a press release Monday.
“They include additional tariffs of 15% on aircraft and parts as well as additional tariffs of 25% on a wide range of agricultural and industrial products imported from the U.S., thereby strictly mirroring the countermeasures imposed by the United States in the context of the WTO case on subsidies to Airbus.”
The commission said the tariffs would go into effect effective November 10 against a variety of products, including tobacco, nuts, fruit juice, fish, spirits, bags, tractors, and casino and gym equipment per the finalized list of applicable classification numbers published last week (a preliminary list c/w product descriptions in addition to CNs can be found here).
In response, a coalition of 20 trade associations representing the U.S., EU, and United Kingdom wine and distilled spirits and related sectors that are likely to be hit hardest by the move, warned that new EU tariffs of 25% on U.S. rum, brandy, vodka, and vermouth would only serve to exacerbate tensions around the Airbus and Boeing disputes and further damage the once-booming transatlantic drinks trade.
“The application of excessive and unwarranted tariffs has to end,” the coalition said. “Hospitality businesses and our consumers, as well as producers, wholesalers and importers of distilled spirits, wine, and beer are being slammed from both sides of the Atlantic in an aircraft dispute wholly unrelated to the drinks business. This is on top of the closings of restaurants, bars, and distillery and winery tasting rooms because of the COVID-19 pandemic.”
According to the group, American whiskey exports to the EU are down 41% since June 2018, while imports of Scotch whisky fell by roughly 34% between October 2019 and August 2020 and various wines from Germany, France, Spain, and the UK covered by the tariffs dropped by more than half during the same period.
“The imposition of additional tariffs would force more businesses to close their doors and lay off more workers in sectors already severely weakened because of the global pandemic & related restrictions,” the coalition predicted.
- U.S. to hit EU with Tariffs of 10% on Aircraft, 25% on Other Goods (Oct. 5, 2019)
- U.S. Slaps Record $7.5 Billion in Tariffs on European Aircraft, etc. (Oct. 18, 2019)
- Trade Tensions Escalating Between U.S. & EU Amid Dueling Tariff Threats (Oct. 19, 2019)