US raises tariffs on European-built aircraft in ongoing dispute over subsidies

Home Business US raises tariffs on European-built aircraft in ongoing dispute over subsidies

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The U.S. government on Friday said it would increase tariffs on aircraft imported from the European Union to 15per cent from 10per cent, ratcheting up pressure on the EU in a 16-year transatlantic dispute over aircraft subsidies.

FILE PHOTO: The logo of Airbus is pictured at the aircraft builder's headquarters of Airbus in Colomiers near Toulouse, France, November 15, 2019. REUTERS/Regis Duvignau/File Photo


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WASHINGTON: The U.S. government on Friday said it would increase tariffs on aircraft imported from the European Union to 15per cent from 10per cent, ratcheting up pressure on Brussels in a nearly 16-year transatlantic dispute over aircraft subsidies.

The U.S. Trade Representative's Office said it remained open to reaching a negotiated settlement with the EU on the issue, but could revise its actions if the EU imposed tariffs of its own in connection with a pair of disputes over the subsidies.

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In a statement released late on Friday, USTR said it would make minor modifications to 25per cent tariffs imposed on cheese, wine and other non-aircraft products from the EU, including dropping prune juice from the list. It did not raise the tariff rates on those product, as it had suggested it might do in October.

The higher aircraft tariff will take effect March 18.

The U.S. action comes as U.S. President Donald Trump has trained his sights on restructuring the more than US$1 trillion U.S. trade relationship with the EU, raising the specter of another major trade war as the global economy slows.

European planemaker Airbus said the U.S. move would hit U.S. airlines already facing a shortage of aircraft and complicate efforts to reach a negotiated settlement with the European Union in the longstanding dispute.

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Airbus said it would continue discussions with U.S. customers to "mitigate effects of tariffs insofar as possible" and hoped USTR would change its position, particularly given the threat of EU tariffs on U.S. products in its own case before the World Trade Organization.

"USTR's decision ignores the many submissions made by U.S. airlines, highlighting the fact that they – and the U.S. flying public – ultimately have to pay these tariffs," Read More – Source

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