US Trade Tariffs Touch the Boundaries of the European Union

The United States President Donald Trump’s favorite tariff game has now reached the European Union, which is already facing several challenges, including the United Kingdom’s impending exit from the bloc and democratic concerns in the several member countries.

On Monday, the Trump administration announced to impose tariffs on nearly $11 billion worth imports of the EU. The move was justified in light of the union’s subsidies for its aircraft manufacturer Airbus, which even the World Trade Organization (WTO) considers unfair.

America, which has been in litigation at the WTO over Airbus subsidies since 2004, is determined at taking an action soon. The country said it was releasing a list of products proposed for tariffs, awaiting a ruling soon from the WTO. “This case has been in litigation for 14 years, and the time has come for action,” stated Robert Lighthizer, the US Trade Representative (USTR).

“Our ultimate goal is to reach an agreement with the EU to end all WTO-inconsistent subsidies to large civil aircraft. When the EU ends these harmful subsidies, the additional U.S. duties imposed in response can be lifted,” he added.

In a tweet on Tuesday morning, President Trump reiterated the plans of imposing tariffs on the EU imports. He wrote, “The EU has taken advantage of the U.S. on trade for many years. It will soon stop!”

On the other hand, an official of the European Commission said that the figure proposed by the US was exaggerated. He said the extent of tariffs that Washington intends to impose would ultimately be set by a WTO-appointed arbitrator.

Monday’s announcement by the US came along with the first step in the tariff imposing process, where a list with items that could be subjected to tariffs would be released, following negotiations between the two sides and public comments.

The list proposed by the Office of the United States Trade Representative (USTR) contains a range of civil aviation products, including Airbus aircraft, as well as several non-aviation items- from cheese to bicycles to kitchen knives to brushes.

According to the USTR the final list wouldn’t be finalized until the WTO rules on the degree of harm that the EU subsidies possess.

In March, the European Union triumphed a round in its WTO counter-case against the US subsidies provided to Boeing Co., Airbus’ chief competitor. The WTO ruling allows the union to compose a similar list of tariffs against the US goods and services in a deadline of several months. The Commission official informed that the bloc has commenced its preparation of a tariffs list against America.

The United States, under President Trump, has been quite stern regarding its trade dealings with other countries, including China, Iran, Canada, Mexico and others. Besides, negotiators from both Washington and Brussels have been striving to make progress in the proposed trade talks for nearly a year now.

However, tariffs drive between the two countries raises alarms for escalating tensions, where the US’ move could also be perceived as a retaliation. However, since it is all regarding the WTO case, the future relations between the two countries depend upon the organization’s final decision.

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