The European Union is hitting U.S. companies with tariffs on up to $4 billion worth of goods, according to a CNBC report on Monday (Nov. 9).
The European Union won the right to impose the tariffs on U.S. goods in retaliation against subsidies for planemaker Boeing, thus deepening a record trade spat that has already prompted Washington to slap duties on EU imports.
The tariffs, effective as of Tuesday (Nov. 10), will impose a 15 percent tariff on imports of all Boeing models and a 25 percent tariff on some agricultural and industrial products. The tariffs are the result of a long-standing dispute over aircraft subsidies.
The move follows the U.S. decision to impose fees following a World Trade Organization (WTO) decree last year authorizing tariffs on $7.5 billion of imported European products, including Airbus SE jets.
The WTO also ruled last month that when the U.S. gave subsidies to Boeing, it was not in compliance with international rules, which caused the EU to move forward with $4 billion in levies.
“We have made clear at every stage that we want to settle this long-running issue. Regrettably, in spite of our best efforts, due to the lack of progress from the U.S. side, we can confirm that the European Union will later today exercise our rights and impose the countermeasures awarded to us by the WTO in respect of Boeing,” Europe’s Trade Chief Valdis Dombrovskis said on Monday (Nov. 9) during a press conference, per CNBC.
The EU wants to resolve the dispute as soon as possible, he said, adding that the EU will remove tariffs if the U.S. will do so as well.
“We are not escalating anything; we are exercising our rights,” he said.
The U.S. presidential win by Joe Biden is considered an encouraging development in the airline subsidies squabble.
“We offered our warm congratulations to President-elect Biden. We will have a full ‘transatlantic to-do list’,” Dombrovskis said. “The key areas are WTO reform and trade and climate change. We should also work to jointly establish a trade and technology council where we could cooperate on new technologies and digital services and be aligned on regulation and standards.”
Europe’s economy is suffering amid a fast-moving resurgence of the coronavirus infection. The U.S. is experiencing a second wave of the virus as well, but not as swiftly as it’s moving across Europe.