US Proposes Tariffs On EU Products Over Airbus Row

A simmering transatlantic trade row risked escalating on Tuesday after the US threatened to impose tariff counter-measures of up to US$11.2 billion on a host of European products.

The threatened US tariffs are in response to subsidies received by aircraft maker Airbus and target a host of European products including helicopters, aircraft parts and gouda cheese.

The riposte come amid a fragile truce between the EU and the US after President Donald Trump angered Europe last year by slapping duties on steel and aluminium imports and threatening new ones on cars.

For more than 14 years, Washington and Brussels have accused each other of unfairly subsidising Boeing and Airbus, respectively, in a tit-for-tat dispute that long predates Trump.

The Boeing-Airbus spat is the longest and most complicated dispute dealt with by the WTO, which aims to create a level playing field in global trade.

In a statement released on Monday, the office of the US Trade Representative (USTR) said the World Trade Organization (WTO) had repeatedly found that European subsidies to Airbus have caused adverse effects to the United States.

"This case has been in litigation for 14 years, and the time has come for action," said US Trade Representative Robert Lighthizer.

"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 US duties imposed in response can be lifted", he said.

The EU fired back on Tuesday, saying that the amounts claimed by the US were "greatly exaggerated".

"The figure quoted by USTR is based on US internal estimates that have not been awarded by the WTO," the commission official added.

Both sides however agreed that the size of the duties was subject to arbitration at the WTO, the result of which was expected in the summer. (AFP)