US-EU Trade Tensions Could Aggravate By Record US Tariff Award On Airbus By WTO

It is expected that the United States will be awarded a record allowance by global arbiters later this week which will allow the US to impose import tariffs on goods from Europe worth billions of dollars in connection to the long running dispute of state subsidy to the aircraft industry in Europe. Analysts fear that this could lead to deterioration of trade ties between the US and Europe.

According to reports, the investigation by the World Trade Organization (WTO), as a part of two separate cases filed with it and which have been ongoing for 15 years now, has revealed that billions of dollars of illegal subsidies from the concerned governments had been received by both the European plane manufacturers Airbus and its US rival Boeing.

Threats of imposing tariffs were issued by both the sides after it was revealed that the Geneva base WTO had discovered that both the parties had indulged in providing subsidies to the two companies illegally and neither party had completely adhered fully to its findings.  But it has been a head start for the United States and the European Union now has to wait till about the beginning of next year to know about the level of retaliation it can exert over Boeing.

It is expected that the WTO will deliver its ruling on the amount of imports from the EU that would be allowed for the US to bring under a new tariff regimen. According to reports quoting sources, it is being expected that the three person tribunal at the WTO will award the US permission to impose tariffs on about $7.5 billion of EU products which will be a record for the global body.

The WTO rarely grants such retaliation rights and it encourages most of the litigants to come to a settlement. In many cases the complainants do not take advantage of such rights also. However the US has clearly indicated that it will impose import tariffs on EU goods to the highest level that will allowed. The US has already made public a list of EU products worth $25 billion which will be used for choosing goods for bringing them under a tariff regimen. The list includes products ranging from aircraft and aerospace parts to wine and from cheese and luxury products exported to the US from the EU.

Analysts fear that already strained trade tensions between the US and the EU could get aggravated by the WTO award in the world’s largest corporate trade dispute.

The impact of US tariffs on steel and aluminum us already being faced by EU manufacturers. They have also been threatened with imposition of tariffs on EU cars and car parts by the US President Donald Trump. There has so far been no retaliation from the EU.

The two parties have engaged in trade talks to ease some of the tensions over trade between them and for avoiding a tit-for-tat tariff war but without much success. Some breakthrough in the area of regulatory cooperation has been made by both the sides, but they have been unable to come to an agreement on a proposed deal to reduce duties. The US is demanding the agriculture should be included in the trade agreement which is being refused by the EU.

(Adapted from

Categories: Creativity, Economy & Finance, Geopolitics, Regulations & Legal, Strategy, Sustainability, Uncategorized

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