EU braces for US tariffs over Airbus, pledges to retaliate

Bloomberg

European Union officials appeared to lose hope of dodging additional punitive US tariffs, as the bloc’s calls for a negotiated settlement over aircraft subsidies have gone unanswered by President Donald Trump’s administration.
EU’s trade chief Cecilia Malmstrom told reporters in Brussels that she expects the World Trade Organization to unveil a specific figure, authorising the US to hit the bloc with import duties in retaliation for illegal subsidies to Airbus SE. “We have not received a positive response” to proposals for a settlement, Malmstrom said after a meeting with EU trade ministers.
The additional tariffs are expected as soon as this month, Malmstrom said. If that happens, the EU will respond in kind when the WTO rules early next year on the bloc’s dispute over US subsidies to Boeing Co.
Europe is also looking “at all options,” including retaliation based on old WTO dispute rulings with which the US isn’t complying, though no decision has been made, Malmstrom said, adding that any response would be compliant with WTO rules.
Europe’s relationship with the US has been strained by Trump’s “America First” foreign policy. Washington has blocked appointments to the WTO’s appeals board, which will paralyse the dispute-settlement forum in December. Controversial US duties on Spanish olives pose a threat to Europe’s system of farm aid. Disputes over aircraft subsidies and auto tariffs over the next two months could push the transatlantic allies to an all-out trade war. “There’s always a risk that things will escalate,” Malmstrom said, adding that the WTO decision over the subsidies to Airbus “may come tomorrow.”
The WTO will authorise the US to impose tariffs on nearly $8 billion of European goods due to illegal state aid provided to the aircraft maker, Bloomberg reported. The US duties will target planes and parts as well as luxury products and leather goods under labels such as Givenchy and Louis Vuitton.