European and U.S. Business Groups Urge Leaders to Scrap Retaliatory Tariffs

Trade Update • MAY 3, 2021

Nearly 90 European and U.S. trade groups representing a diverse range of organizations and companies impacted by EU-US retaliatory tariffs last week called on European Commission President Ursula von der Leyen and U.S. President Joe Biden to permanently remove the tariffs on construction machines and other products, which they emphatically stress are unrelated to ongoing transatlantic trade disputes.

The World Trade Organization ruled last year the U.S. had the right to hit EU nations with $7.5 billion in tariffs because of Europe’s Airbus subsidies. The WTO also ruled that the EU could, in turn, hit the U.S. with $4 billion in tariffs to punish the U.S. for having subsidized Boeing. Both the U.S. and EU began levying those tariffs, causing significant political friction and trade disruption.

Although the trade associations welcomed the recent suspension of EU and US tariffs, they note that is only valid for 4 months, until July 11, 2021.

“We are hopeful that this suspension will help reset the vital transatlantic trade relationship and lead to the permanent removal of all additional and retaliatory tariffs,” the groups said, adding that it was “important for our members, already drastically affected by the economic impact of the pandemic, to be able to rely on the continued suspension or complete removal of these tariffs after July 2021.”

Fed up with being caught in the crossfire of the Boeing-Airbus battle over government aircraft subsidies, the groups declared that “Our sectors should no longer incur collateral damage in unrelated disputes.”

Securing the permanent removal of retaliatory tariffs and avoiding additional new tariffs on their products, “would create the necessary certainty and stability needed to grow the transatlantic economy as it recovers from the COVID-19 pandemic,” the groups said.

USTR Tai Optimistic

U.S. Trade Representative Katherine Tai has previously stated a desire to bring the costly, 15-year-long dispute to a final resolution. Testifying recently before a Senate subcommittee, Tai said she was “at this point, very motivated and hopeful that we will get the traction that we need with our trading partners and very much hope that they see this opportunity as I do.”