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EU Plans Tariffs of its Own

Days after the US shocked Europe's trade officials with protectionist steel duties the EU Commission will decide on airline tariffs for non-EU airlines.


The Sept. 11 attacks sparked a round of government subsidies to airlines

A rattled European Commission meets this Tuesday to decide on legislation that would put tariffs and restrict landing rights for any non-European Union airline.

The decision comes just a few days after the United States incited the anger of trade officials around the world by placing tariffs of 30 percent on imported steel. The move was viewed as an effort by US President George W. Bush to protect American steel makers at the expense of European, Russian and Chinese steel-makers.

Officials told the Financial Times that Tuesday’s legislation is not revenge for last week’s tariffs. But an American official said that placing tariffs is "a wrong path to take."

The legislation specifically targets airlines that have received unfair subsidies. At issue is a $15 billion bailout package the United States government gave US airlines after the Sept. 11 terrorist attacks.

European airlines have argued in the past that the billions have allowed US carriers to slash prices on transatlantic routes.

European capitals have reacted by providing subsidies of their own to their national airlines. Germany made 22.4 billion euro available to the country's airlines to cover any liabilities following the attacks.

Brussels diplomats said this weekend that they would most likely not extend the subsidies past March 31, the orginally agreed upon date. But the diplomats also said Brussels wanted to wait until the US government made their subsidies decision on March 20.

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