For years now, the US and Europe have been stuck in an argument over mutual claims of illegal aid to Netherlands-based Airbus and US-based Boeing, plane giants looking to gain advantage in the global jet business.
The decade-and-a-half-long case has been making its way through the World Trade Organisation (WTO), and is reaching its final stages.
And upon recent findings that EU subsidies to Airbus ‘has adversely impacted the United States’, US President Donald is pulling one of his classic moves, threatening tariffs on US$11 billion (AU$15 billion) worth of European products.
Trump protects US economy above all else
Trump said on Twitter:
‘The EU has taken advantage of the US on trade for many years. It will soon stop!’
According to RAW, the US Trade Representative proposed a list of tariff-worthy EU products a day prior to this tweet. The list included a wide range of things, from large commercial aircraft, to dairy products and wine.
This will be added to the products already being hit with US tariffs, such as exported steel and aluminium. Trump has also threatened to hit EU cars with a similar bat.
The final list is expected within the next two to three months.
In the meantime, the European Commission plans to retaliate in a similar matter over Boeing subsidies. They announced on Tuesday that they have already started to draw up plans of a response.
‘The Commission is starting preparations so that the EU can promptly take action based on the arbitrator’s decision on retaliation rights in this case,’ a Commission spokesman said.
‘The European Union remains open for discussions with the United States, provided these are without preconditions and aim at a fair outcome.’
EU and US must seek truce to protect global trade
Though Trump is certainly a man up for negotiating, he’s also a man hell-bent on keeping the US economy prosperous. So the success of these discussions is up in the air.
In the past, both sides have managed to have their unlawful subsidy claims received, but they fail to agree on the amount involved and whether each has complied with earlier WTO rulings.
French Finance Minister Bruno Le Maire told a conference in Paris that it was imperative the EU and the US reach a mutual agreement. He stated:
‘When I see the situation global growth is in, I don’t think we can afford to have a trade conflict, even if only on the specific issues of the aircraft industry in the United States and Europe.’
If only it were that simple.
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