November 13, 2019

U.S. Readies $11 Billion in Tariffs on E.U.

The United States’ arguments at the W.T.O. have centered on billions of dollars of “launch aid” that the European Union has given Airbus to develop new products. The United States has long argued that such aid gave Airbus an unfair advantage, allowing it to gain market share in Europe, Australia, China, South Korea and elsewhere at Boeing’s expense.

European criticism of the American aviation sector has mostly focused on government research contracts granted to Boeing through agencies like the Defense Department and NASA, as well as tax breaks at the federal, state and local levels.

While the subsidy dispute predates Mr. Trump’s trade war by many years, the conflict has recently taken on some of the same tone that has characterized relations between the United States and Europe during the last two years, including reciprocal threats, radically different interpretations of the same facts, and an undercurrent of hostility among the NATO allies.

The two governments announced plans in July to negotiate an agreement that would reduce tariffs and other barriers to trade on both sides of the Atlantic, but have since disputed exactly what would be included in the agreement.

Chad Bown, a senior fellow at the Peterson Institute, said the list being drawn up by the United States was notable because it targeted European aircraft sales, which have not typically been included on past retaliation lists. “If Trump goes first, expect the E.U. to respond by hitting Boeing’s sales in Europe,” Mr. Bown said.

He added that tariffs on Airbus would also affect American companies, since it purchases many components for its aircraft from the United States.

Trade experts suggested the organization was likely to decide in the United States’ favor on the tariffs, which they described as significant but not surprising.

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