The European Union will impose tariffs on American goods worth $4bn starting today in a tit-for-tat escalation over illegal aid to aircraft manufacturers Boeing and Airbus.

EU trade chief Valdis Dombrovskis yesterday expressed a preference to negotiate a settlement, saying the bloc would drop its duties if the US withdrew the tariffs it imposed on $7.5bn (€6.84bn) of EU goods last year in the 16-year dispute.

The EU levies will target various Boeing models, which will face a 15pc duty, as well as other goods ranging from spirits and nuts to tractors and video games, which will be subject to a 25pc levy. The escalation comes at an awkward moment for the EU, which is contending with a surge of Covid cases and its worst recession in history.

“We call on the US to agree that both sides drop existing countermeasures with immediate effect, so that we can quickly put this issue behind us,” Mr Dombrovskis told reporters after a meeting of EU trade ministers. “Removing these tariffs would represent a strong win-win for both sides.”

The imminent tariff strike is meant to give the EU more leverage in pushing for a truce that has been elusive with US President Donald Trump, who will remain in office until January 20. The tit-for-tat move may make it easier for President-elect Joe Biden to embrace longstanding European calls to settle the transatlantic dispute over aircraft aid at the negotiating table.

For the past year, the EU has faced US tariffs on $7.5bn (€6.84bn) of European goods after Washington won a World Trade Organization (WTO) case against market-distorting aid to Airbus. Last month, in a parallel lawsuit, the EU received final WTO permission to hit $4bn (€3.38bn) of US products with duties over unfair subsidies to Boeing.

The WTO damages award in the Boeing case came months later than the EU had hoped, complicating deliberations as a result of its proximity of the US election on November 3. The timing of the planned tariffs is a political compromise by coming after the US ballot and before Mr Trump leaves the White House.

German Economy Minister Peter Altmaier echoed Mr Dombrovskis yesterday in urging the US to enter into talks on a settlement of the aircraft-aid row, telling reporters “we remain ready at any time to put a negotiated solution in place”.

Article Source: Click Here