Published: Wed, April 10, 2019
Worldwide | By Lisa Hogan

Trade War With Cheese: Trump's New EU Tariffs

Trade War With Cheese: Trump's New EU Tariffs

The U.S. trade authority released a preliminary list of products to be covered by the additional import duties, including helicopters, passenger and cargo aircraft, fuselages, and other aircraft parts.

The proposed tariffs are subject to public consultation in the United States and arbitration at the World Trade Organization, which is expected to deliver its findings in the summer.

The US on Monday threatened to impose tariff counter-measures of up to $11.2 billion on a host of European products in response to subsidies received by aircraft maker Airbus.

Trump in June a year ago imposed tariffs of 25% on steel imports and 10% on imported aluminum from the European Union in a move that seems aimed at helping the US industry but has also raised costs for many businesses that import these products.

Ohler said a WTO ruling last week against tax breaks for its us rival Boeing should allow the European Union to seek "even greater countermeasures".

"It will soon stop!" he wrote. The Boeing-Airbus spat is the longest and most complicated dispute dealt with by the WTO, which aims to create a level playing field in global trade.

The United States and Europe have been locked in a years-long spat over mutual claims of illegal aid given to plane giants-Netherlands-based Airbus and US -based Boeing-to help them gain an advantage in the world jet business.

The EU has argued the Boeing has benefited from similar government support.

The United States said once the WTO issues its report on the allowable size of the tariffs, it would issue a final list of affected goods.

The move would mark an escalation in trade tensions between the United States and the EU.

Aircraft and cheese are among the products that could be hit by tariffs, the US Trade Representative (USTR) said.

Some EU members, led by France, are already skeptical of the value of negotiations with the USA, which were agreed to last July in a bid by the EU to avoid auto tariffs Trump has threatened.

Economists say the Trump team appears to want to use the ruling not merely to help Boeing but to heighten pressure on trading partners like Germany with which the US has a trade deficit.

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. 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.

Germany is particularly apprehensive of possible US tariffs on auto imports. Today on the show, a look at what's behind this latest round of proposed tariffs - and what this means for the economies of Europe and the U.S.

"Our ultimate goal is to reach an agreement with the European Union to end all WTO-inconsistent subsidies to large civil aircraft", he said.

The USTR's statement also comes as Boeing faces a crisis over its 737 MAX aircraft, which is grounded over safety fears following two fatal accidents.

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