The US is set to impose $7.5bn (£6.1bn) of tariffs on exports from the EU including scotch whisky, French wine and cheese and aircraft in retaliation for subsidies given to the aerospace group Airbus after a World Trade Organization (WTO) ruling..
The tariffs announced on Wednesday could come into effect as early as 18 October and represent a significant widening of the Trump administration’s trade dispute with the EU, adding to growing tensions in the world economy.
The US trade representative’s office (USTRO) released a list of hundreds of European sagricultural products that will be subject to a 25% tariff, including British woollen jumpers and pullovers. Cookies, salami, butter and yogurt from some countries will be affected, along with olives from France, Germany and Spain, EU-produced pork sausage and other pork products other than ham, and German coffee.
The USTRO said it would “continually re-evaluate these tariffs based on our discussions with the EU” and expects to enter talks in a bid to resolve the dispute.
Still some Italian foods – Parmesan, Reggiano, Romano and provolone cheese – were hit with tariffs as were Italian fruits, clams and yogurt. Also seeing new tariffs are German and British camera parts, industrial microwave ovens, printed books, sweet biscuits and waffles.
The US has also imposed a 10% levy on EU-made airplanes that could hurt US airlines that have ordered billions of dollars of Airbus aircraft.
Food importers in the US were dismayed by the move and said the levies would hurt the upcoming crucial Christmas sales period.
“It looks pretty bad. They hit cheese hard,” said Ralph Hoffman, a vice president of the Cheese Importers Association of America.
It comes as the global economy is already struggling with the effects of a trade war against China launched by the Trump administration. Stock markets worldwide sold off on Wednesday amid signs of an economic slowdown and worsening trade relations.
The EU said on Wednesday it would retaliate if the US imposed tariffs. Cecilia Malmström, the EU commissioner for trade, issued a statement saying the EU had shared proposals on settling the dispute in July.
She said: “Our readiness to find a fair settlement remains unchanged. But if the US decides to impose WTO-authorised countermeasures, it will be pushing the EU into a situation where we will have no other option than to do the same.”
The WTO ruling is the latest blow in a 15-year battle between the European manufacturer and its US rival, Boeing over state aid given to the companies. Next year, the WTO is preparing to rule on what tariffs the EU can impose in retaliation to US state aid given to Boeing.
The case, first brought in 2004, involved aid given to Airbus by EU nations for the development of its A380 superjumbo jet and the smaller A350. The US alleged that Airbus illegally received loans on preferential terms and billions of euros in grants. The WTO, which is tasked with settling trade disputes, gave a mixed verdict in 2010, which was followed by years of appeals.
Boeing issued a statement blaming Airbus’s non-compliance with WTO rulings as the reason for the possible tariffs.
A spokesman said: “Unfortunately, Airbus’s non-compliance will negatively impact European member states, industries, and businesses completely unrelated to Airbus’s actions, as well as Airbus’s airline customers. Yet even today, Airbus could still completely avoid these tariffs by coming into full compliance with its obligations. We hope it will finally do that.”
Airbus said the imposition of tariffs would create insecurity and disruption to the aerospace industry and the broader global economy. The company called for a negotiated settlement.
Guillaume Faury, Airbus’s chief executive, said: “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 travellers.
“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.”
Airbus and Boeing vie every year for the top position in the aircraft manufacturing and sales leagues. Boeing last year delivered 806 planes to customers, six more than Airbus.
Boeing has endured one of the most difficult years in its history, after two crashes involving its 737 Max jet that killed 346 people following the apparent malfunction of safety features.
