The Trump administration today imposed its previously announced 10% and 25% tariffs tariffs on a record $7.5-billion worth of European Union goods, despite threats of retaliation. The punitive tariffs, which took effect after midnight, came after the World Trade Organization authorized the move earlier this week.
The WTO’s dispute settlement body earlier this week gave Washington the green light to take the countermeasures — the largest ever approved by the trade body — against the EU and Airbus-producing countries Britain, France, Germany and Spain in compensation for billions worth of illegal government subsidies to the European aerospace company Airbus over several decades that were found to have put rival U.S. planemaker Boeing at a competitive disadvantage.
As a result of this decision, the U.S. has now imposed a tariff of 10% of Airbus planes and a 25% duty on a wide range of consumer products, especially those targeting EU agricultural producers, including French wine, Spanish olives, Scottish whiskies, English cheddar and other cheeses from across Europe.
In response, EU trade chief Cecilia Malmström said the move leaves it with “no alternative but to follow through in due course with our own tariffs in the Boeing case, where the U.S. has been found in breach of WTO rules.” There is a vast disparity between the two cases, however, as the one currently being arbitrated (a decision is expected early next year) deals only with Washington state subsidies to Boeing that may result in penalties in the hundreds of millions — not billions.
The 15-year-old Airbus-Boeing feud is just one of several issues stoking transatlantic tensions since President Trump took office in 2017. He and European Commission President Jean-Claude Juncker agreed in July 2018 to a ceasefire in the wide-ranging conflict in order to hold trade talks that have so far led nowhere.
Additional Chapter 99 numbers have been created by the Office of the U.S. Trade Administration and the U.S. Customs and Border Protection has issued instructions on entry guidance and implementation.
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