Despite European efforts to avoid an escalation in trade tensions with the U.S., a tit-for-tat tariff battle over illegal aircraft subsidies is in the offing, according to the European Union’s chief trade negotiator.
“Our view is that we have enough tariffs in the world as it is, so imposing tariffs on each other, which strictly speaking we are allowed to do according to the World Trade Organization, would not be a good solution to this,” European Trade Commissioner Cecilia Malmstrom said on Monday.
“We have made a quite detailed proposal,” she said. “So far, unfortunately, the U.S. has not said that they are willing to negotiate.”
Malmstrom told reporters in Brussels Monday that the World Trade Organization will formally authorize the U.S. to impose retaliatory tariffs on European goods as soon as Sept. 30 over a dispute involving illegal state aid for Airbus SE and the Boeing Co.
EU, U.S. ‘Sinned’
Both the EU and the U.S. have “sinned” in providing illegal subsidies to their respective aerospace industries and it would be better to President Donald Trump to settle the nearly 15-year old transatlantic aircraft dispute than to resort to tit-for-tat tariffs, she said.
The U.S. has already proposed a retaliation list that could cripple Airbus’ U.S.-based operations — like the A320 manufacturing facility in Mobile, Alabama — because it targets more than $9 billion worth of American-bound exports of European aircraft, helicopters and parts. The U.S. tariff list also targets billions of dollars worth of products made by Europe’s producers of luxury brands — like LVMH Moet Hennessy Louis Vuitton SE, Remy Cointreau SA, and Pernod Ricard SA.
A spokesman for the office of the U.S. Trade Representative did not immediately respond to Bloomberg’s request for comment.
“If there’s no negotiations we would of course feel forced to impose our tariffs,” Malmstrom said.
The EU has published a preliminary list of U.S. goods — from ketchup to video-game consoles — being targeted in a $12 billion plan for retaliatory levies related to that claim.