European Union plans for own retaliation in aircraft dispute with US

US Threatens EU With Tariffs Over Aircraft Subsidies Retaliation Expected

The US on Monday (8 April) threatened to impose tariff counter-measures of up to $11.2 billion on a host of European products, including cheese and wine, in response to subsidies received by aircraft maker Airbus.

Ahead of Trump's announcement, the US Trade Representative released a preliminary list of goods to be taxed, with its whopping 14 pages going into great detail regarding specific goods, from "boiled claims in immediate airtight containers, the contents of which do not exceed 680 g gross weight" to "artists' brushes, writing brushes and similar brushes for the application of cosmetics, valued o/10 cents each".

The threatened USA tariffs are in response to subsidies received by aircraft maker Airbus and target a host of European products including helicopters, aircraft parts and cheese.

Donald Trump has threatened to impose U.S. tariffs on $11bn (£8.4bn) of goods from the European Union, raising the stakes in the transatlantic trade dispute between the world's two largest economic superpowers.

European shares opened slightly lower on Tuesday, weighed down by planemaker Airbus and its suppliers, which took a hit from proposed USA tariffs, while an event-packed week kept investors cautious.

"It will soon stop!" he wrote.

A Commission spokesperson said it was "starting preparations so that the European Union can promptly take action based on the arbitrator's decision on retaliation rights in this case".

The president gave no timetable for the move, which comes amid an escalating trade row after the United States initially threatened the tariffs on Monday in response to subsidies received by aircraft maker Airbus. The United States holds that these subsidies are much higher than the ones Boeing receives from the US, as the WTO has also determined.

Daniel Rosario, a spokesperson for the European Commission, said the European governing body remains open to discussions, so long as they're not based on pre-conditions.

It began in 2018 when the United States started slapping tariffs on the imports of steel and aluminium from a number of countries, including the EU.

"The interest of the United States as the interest of the European continent and France is to reach an amicable agreement", said French Minister of the Economy Bruno Le Maire.

Airbus is also skeptical about the proposed amount.

Mr Lighthizer's office said it would "identify products of the European Union to which additional duties may be applied until the European Union removes those subsidies" under Section 301 of the Trade Act of 1974.

"Get ready for more tit-for-tat scrapping to follow", said John Woolfitt of London brokerage Atlantic Markets. It has already brought a case on the issue to the WTO.

Trump's tweet comes one day after the U.S.

While the size of the tariffs is small compared with the hundreds of billions the USA and China are taxing in their trade war, it suggests a breakdown in talks with the European Union over trade.

In the end, more tariffs could further raise consumer prices in the United States and weigh on the global economy at a time when it's showing alarming signs of stress as the USA wages a broader trade war with China.

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