After 15 years of disputes, the WTO allowed the US to take action in response to EU subsidies allocated to the Airbus consortium.
The US announced the impending introduction of 10 percent duties on European-made Airbus aircraft, as well as 25 percent duties on French wine, Scotch and Irish whiskey and European cheese as punishment for “illegal” subsidies to the aircraft manufacturer allocated by the EU authorities.
The announcement came after the World trade organization, in a long-standing dispute, allowed Washington to impose duties on EU goods worth $ 7.5 billion annually.
This move could trigger a transatlantic trade war.
Earlier, the US and China imposed duties on each other’s goods worth billions of dollars, and the trade war between the two countries has been going on for more than a year.
The list of EU goods subject to duties compiled by the US trade representative included large Airbus aircraft, which are manufactured in France, the UK, Germany, and Spain – the four countries of the consortium.
The decision on fees comes into force on October 18.
At the same time, duties will not be imposed on parts of European – made aircraft that are used at the Assembly plant of Airbus in Alabama and American competitor Airbus-Boeing. This will save jobs in the US manufacturing sector.
“Finally, after 15 years of litigation, the WTO has confirmed that the US has the right to take countermeasures in response to illegal EU subsidies,” US trade representative Robert Lighthizer said in a statement.
“We expect to start negotiations with the European Union aimed at resolving this issue in a way that will benefit American workers,” Lighthizer added.
The introduction of duties will seriously affect the four mentioned countries of the Airbus consortium. They will include Spanish olives, British sweaters, and wool products, German tools and coffee, as well as British whiskey and French wine. Cheese from almost all EU countries will be subject to 25 percent duties, but Italian wine and olive oil, as well as European chocolate, will not fall under them.
The scale and scope of the duties are significantly reduced compared to the list of goods worth $ 25 billion compiled by Washington earlier this year. It included helicopters, basic aircraft components, seafood, luxury goods and other categories of expensive goods that were excluded from the list announced on Wednesday.
An informed source said that the US trade representative deliberately did not use the WTO-approved response in full to lure the EU to the negotiating table.
However, the decision was accompanied by an open warning.
“The United States has the right at any time to raise duties or make changes to the list of goods falling under them. The U.S. trade representative will constantly review these fees based on our negotiations with the EU,” the trade representative said in a statement.