After WTO decision: EU imposes punitive tariffs on US products



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Despite the change of power in the US, the EU wants to raise special taxes on American products in the aircraft subsidy dispute. Punitive tariffs could hit ketchup or game consoles, for example.

The EU will introduce new punitive tariffs on US imports due to illegal subsidies for US aircraft manufacturer Boeing. European Trade Commissioner Valdis Dombrovskis said the Commission has received the green light from the World Trade Organization (WTO) to impose punitive tariffs. “And we do it now.” The EU will therefore not wait to see if future US President Joe Biden initiates a change of course in US trade policy.

One reason is that Biden is also seen as more protectionist in terms of economic policy. Dombrovskis stressed that the EU is still ready for negotiations. The European proposal is for both sides to suspend their tariffs. “We are ready to do it at any time.” But the US must also act on its part. If the US withdraws or suspends its tariffs due to subsidies for European aircraft manufacturer Airbus, the EU will do the same.

Punitive tariffs could hit ketchup, nuts and consoles

According to initial EU information, the new European special levies could be levied on products such as ketchup, wine, suitcases and game consoles. Among the possible targets of the tariffs were also named American tractors, helicopters, bicycle frames, nuts, chocolate and frozen fish. For example, wine from Germany and France, Parmesan from Italy and olive oil from Spain are affected by the special US rates of 25% due to unauthorized subsidies for Airbus. There is a special 15 percent tax on aircraft imports.

The basis for the action announced by the EU is a WTO announcement last month. Its brokers decided in mid-October that the EU could impose punitive tariffs on US imports of around $ 4 billion annually due to illegal subsidies for US aircraft manufacturer Boeing. In a similar case, US arbitrators had already approved punitive tariffs on products from the EU of $ 7.5 billion due to illegal subsidies for Airbus. Special levies aim to compensate for the competitive disadvantages resulting from grants.


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