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The World Trade Organization said the United States can levy tariffs on $7.5 billion worth of European Union goods, ruling on a 15-year dispute over illegal subsidies for Airbus.
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The decision potentially opens a new front in President Trump’s trade war. U.S. Trade Representative Robert Lightheizer in April said the Trump administration would hit European goods such as cheese, olives and whiskey with tariffs. The levies cannot go into effect until a WTO panel approves them.
“This case has been in litigation for 14 years, and the time has come for action. The administration is preparing to respond immediately when the WTO issues its finding on the value of US countermeasures,” U.S. Trade Representative Robert Lighthizer said in April.
“Our ultimate goal is to reach an agreement with the EU to end all WTO-inconsistent subsidies to large civil aircraft. When the EU ends these harmful subsidies, the additional US duties imposed in response can be lifted.”
The European Union has vowed to retaliate if the U.S. moves ahead with the tariffs.
“If the U.S. decides to impose WTO authorized countermeasures, it will be pushing the EU into a situation where we will have no other option than to do the same,” said EU Trade Commissioner Cecilia Malmstrom.
As for Airbus, the company said Wednesday it will work with its partners, customers and suppliers to address the matter.
“Airbus will continue working with its US partners, customers and suppliers, to address all potential consequences of such tariffs that would be a barrier against free trade and would have a negative impact on not only the US airlines but also US jobs, suppliers, and air travelers,” Airbus CEO Guillaume Faury said in a press release out Wednesday. “Airbus is therefore hopeful that the US and the EU will agree to find a negotiated solution before creating serious damage to the aviation industry as well as to trade relations and the global economy.”
