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EU to impose tariffs on US goods over Boeing dispute

November 9, 2020

As part of a dispute over subsidies for Boeing and Airbus, European goods such as cheese and wine are subject to tariffs in the US. Now the EU is retaliating with penalties on up to $4 billion worth of US services.

An array of US products: Jeans, peanut butter, motorcycle parts and whiskey
Image: picture-alliance/dpa/C. Charisius

European Commission Executive Vice President Valdis Dombrovskis said on Monday that the EU will push ahead with plans to impose tariffs and other penalties worth up to $4 billion (€3.37 billion) on an array of US imports.

The tariffs come in retaliation to the US awarding illegal subsidies to the airplane manufacturer Boeing. A World Trade Organization (WTO) ruling granted authorization for the tariffs in October. EU trade ministers subsequently met over videoconference to discuss the move.

"Regrettably, in spite of our best efforts due to the lack of progress from the [US] side, we can confirm that the European Union will later today exercise our rights and impose counter-measures awarded to us by the WTO," European Commission Vice President Valdis Dombrovskis said.

Read more: Airbus-Boeing WTO dispute: What you need to know

The US had previously imposed tariffs against the EU last year, on products including wine, cheese and single-malt whiskey, as part of a dispute over subsidies for aircraft manufacturers has been going on for 16 years.

EU takes action ahead of Biden's inauguration

The new step taken by the EU surprised those who believed that the European bloc may hold off from an aggressive response following the election of Joe Biden who is seen as a friendlier face for the White House.

Europe is hopeful of a softer stance under Biden and a greater commitment to multilateralism than his predecessor.

Former Latvian Prime Minister Dombrovskis instead urged Washington to reach a deal over global subsidies for aviation and end the dispute.

"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," he said.

A 'short-sighted' move

In response to the decision, Frank Sportolari, president of the American Chamber of Commerce (AmCham) lobby group in Germany, told DW that the move was premature in light of the recent US election result.

"I think that is incredibly short-sighted. Biden is going to take office in two months. Why can't we wait? And try and find a way forward together? We have got to get off this tit-for-tat."

He went on to say that AmCham membership was heavily in favor of a Joe Biden presidency, hoping he would not "combine geopolitics with trade issues, as President Trump has done."

Gouda cheese from the Netherlands
The US government imposed tariffs against Gouda cheese among other products in 2019Image: picture-alliance/dpa/R. Utrecht

German Economy Minister Peter Altmaier told a press conference before the meeting that there are "great expectations and the hope that the American presidential elections will lead to a return to multilateral engagement in international trade and that it will be possible to overcome past conflicts,"

Tit-for-tat tariffs on Gouda cheese and frozen fish

In October the EU published a list of potential products which it may slap tariffs on. The selection inclues a wide range of products including frozen fish and shellfish, dried fruit, tobacco, rum and vodka, handbags, motorcycle parts and tractors.

In 2019 the WTO gave permission to the US to bring in its own tariffs, worth up to $7.5 billion (€6.3 billion), on products from the EU. That was in response to illegal state support for the European plane maker Airbus.

EU products which were impacted by the US tariffs included Gouda cheese, single-malt whiskey and French wine.

ab/rt (dpa, AFP, Reuters)