US Considers $3.1 Billion in Tariffs for EU Imports

US may tax EU, UK luxury goods to combat unfair EU subsidies to Airbus
June 24, 2020 Updated: June 24, 2020

The United States is considering a raft of new tariffs on British and European Union imports as a dispute over EU subsidies to aircraft manufacturer Airbus threatens to morph into a trans-Atlantic trade war. A notice detailing the goods in question was posted by the Office of the U.S. Trade Representative (USTR) this week.

The notice (pdf) is filed as the “Enforcement of U.S. WTO Rights in Large Civil Aircraft Dispute,” as the World Trade Organization found that the European Union had been supplying illegal subsidies to Airbus SE. The goods in question have an estimated 2018 import trade value of $3.1 billion.

Items as diverse as decaffeinated coffee, metal-working tools, and trucks with lifting equipment are being considered for the imposition of new tariffs, while Italian-style cheeses, non-military helicopters, luxury handbags, wooden tool handles, and camera lenses are being considered for additional duties. The USTR is inviting public comments on whether specific items should be removed from the list—or the tariff increased “up to a level of 100 percent,” effectively doubling the price of the products to U.S. consumers.

Aircraft Subsidy Conflict

In a complex and long-standing dispute between the United States and the EU on subsidies to aircraft manufacturers Boeing and Airbus, the WTO ruled in October that given the EU’s illegal aid to Airbus, the Trump administration had the right to retaliate against European imports worth around $7.5 billion. However, the WTO is poised to hear a related case where the EU accuses the United States of unfairly subsidizing American aircraft giant Boeing.

An Airbus A350-1000 and an Airbus A330 NEO are seen during the 53rd International Paris Air Show at Le Bourget Airport near Paris,
An Airbus A350-1000 and an Airbus A330 NEO are seen during the 53rd International Paris Air Show at Le Bourget Airport near Paris, France, on June 17, 2019. (Pascal Rossignol/Reuters)

The USTR notice said that “In connection with this review, the U.S. Trade Representative is considering modifying the list of products of certain current or former EU member States that currently are subject to additional duties.”

The notice is to be published in the Federal Register on Friday, and comments must be submitted by July 26.

According to the notice, the measure leaves the door open to “achieving a mutually satisfactory solution.” However, the public is also encouraged to consider whether maintaining or imposing additional tariffs on the products of current or former EU States “would cause disproportionate economic harm to U.S. interests, including small or medium-size businesses and consumers.”