EU levies $4 billion tariffs on US goods and services as part of Boeing-Airbus dispute

On Monday, November 9, the European Union announced that it would go ahead with its $4 billion tariff plans on the United States goods and services as part of the long-running illegal aid for plane maker Boeing. 

This decision is the latest twist in the 16-year trade battle over aircraft subsidies that turned increasingly sour under the protectionist instincts of the US President Donald Trump.

The EU’s top trade official Valdis Dombrovskis said ahead of a virtual EU trade ministers meeting said “The US imposed tariffs following the WTO ruling in the Airbus case. Now, we have a WTO ruling also in our Boeing case, allowing us to impose our tariffs and that’s what we are doing.”

The WTO had ruled that Boeing was given an unfair edge over Airbus by tax breaks from Washington State, where Boeing once had headquarters.

The EU tariffs on US goods will come into effect from Tuesday, November 10.

Valdis Dombrovskis also said, “As it has been stated on numbers of occasions from the EU side, we’re ready to suspend or withdraw our tariffs anytime when the US suspends or withdraws their tariffs.”

A year ago, the WTO had ruled in a similar manner in favour of the United States, allowing it to slap penalties on EU goods worth up to $7.5 billion — including Gouda cheese, single-malt whiskey and French wine — over European support for Boeing rival Airbus.

After Trump imposed tariffs on European aluminium and steel and threatened punitive duties on cars, the Europeans had hoped that he would hold fire on the tariffs related to the Airbus-Boeing dispute.

But having repeatedly failed to achieve a negotiated solution, the EU decided to announce punishment of its own.

However, EU trade chief Dombrovskis has great expectations from the United States new president Joe Biden. Some initial contacts have already been made with Biden wanting the US to remove tariffs on European aluminium and steel and resolve dispute over civil aircraft subsidies for planemakers Boeing and Airbus.