For years there has been a dispute between the EU and the USA over subsidies for aircraft manufacturers. The consequence: mutual tariffs. Now the USA are stepping up.
In the long-standing dispute over subsidies for the aircraft manufacturers Airbus and Boeing, the USA wants to raise additional tariffs on French and German products. The tariffs affect “aircraft components from France and Germany, certain wines as well as cognacs and other spirits from France and Germany,” as the US Trade Representative (USTR) announced on Wednesday (local time). The USTR described the move as a measure against the tariffs imposed by the European Union, which it considers unfair.
The tariffs are part of the dispute over public aid paid to Airbus and Boeing. In addition, this year the EU was authorized by the World Trade Organization (WTO) to impose additional tariffs on US products.
USA feels disadvantaged
Washington thinks, however, that it is disadvantaged by the chosen calculation method. According to Donald Trump’s administration, this has led to excessive tariffs on US products. This concerns, on the one hand, the reference period and, on the other hand, the geographical scope.
For example, “to enforce its tariffs, the EU used trade data from a time when trade volumes were significantly reduced due to the dire effects of Covid-19 on the global economy,” the USTR said. “The result of this decision was that Europe was imposing tariffs on many more products than would have been the case with a normal deadline.” The US has now announced that it will “change its reference period in order to align with that used by the EU”.
The tariff dispute has been simmering for years
Since 2019, the USA has been levying punitive tariffs on European imports such as wine, cheese and olive oil or Scottish whiskey, as well as a 15 percent tax on Airbus aircraft. In response, this year the EU imposed additional tariffs on imports from the US worth $ 4 billion.
The European aircraft manufacturer Airbus and its US competitor Boeing – and thus the EU and the USA – have been fighting at the WTO since October 2004 about state funding for the two groups, which both sides consider to be illegal.