The Trump administration has escalated its long-standing trade dispute with the EU over aircraft subsidies, announcing increased tariffs on aircraft parts and beverages, including brandy from France and Germany.
The move came in a declaration from the US Bureau of Commerce
Representing late Wednesday and will apply from January 12 – just over a week before Joe Biden takes the oath of office as President of the United States.
USTR said it would increase levies on the grounds that the EU had improperly applied tariffs on $ 4 billion in U.S. goods last month, which was cleared by the World Trade Organization, calculating it based on trade volumes since the coronavirus pandemic erupted earlier this year.
Washington said that Brussels therefore imposed duties on “many more products” than it would have if the tariffs had been calculated on the basis of a “normal period”.
The $ 4 billion in tariffs imposed by the EU followed the United States $ 7.5 billion targeting in EU goods from October 2019, which was authorized by the WTO as a sanction for subsidies to European aircraft manufacturer Airbus. EU tariffs, meanwhile, were authorized in response to US subsidies for the benefit of Airbus rival Boeing.
The Trump administration and the EU have said they want resolve the dispute but the two sides failed to reach a deal, which will be one of the biggest tests of Washington-Brussels rapprochement on trade under Mr Biden’s administration.
Products targeted for higher tariffs in Washington’s latest action on Wednesday included “aircraft parts” as well as “certain non-sparkling wines” and “certain cognacs and other grape brandies.” The higher tariffs will only apply to French and German products.
The fight for aircraft subsidies simmered for years but intensified sharply under the Trump administration alongside tensions over digital taxes introduced in the EU, tariffs on metals imposed by the United States and taxes on cars threatened by Washington.