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The World Trade Organization has ruled that the European Union can impose up to $4 billion in tariffs on U.S. goods due to illegal subsidies given to Boeing, while the U.S. disputes the ruling and calls for negotiations to restore fair competition in the aircraft manufacturing sector.
The European Union may impose up to $4 billion worth of tariffs on goods imported from the United States, the World Trade Organization (WTO) said in its most recent ruling.
According to the WTO, the U.S. was found guilty of illegally subsidizing the American aircraft manufacturer, Boeing.
It is my hope that the U.S. will now drop the tariffs imposed on E.U. exports last year. If it does not happen, we will be forced to exercise our rights and impose similar tariffs.- Valdis Dombrovskis, European Trade Commissioner
The long-awaited decision comes almost exactly one year after the WTO made a similar ruling and allowed the United States to impose $7.5 billion worth of tariffs on European imports.
At that time, the international trade body found the E.U. guilty of illegally subsidizing its own aircraft manufacturer, Airbus. The E.U. since said it has ended the subsidies.
See Also:Trade NewsAmong the numerous goods targeted by the U.S. tariffs include packaged olive oil from Spain as well as some table olives from France and Spain, all three of which face a 25 percent import duty.
For its part, the E.U. has already identified a number of industrial and agricultural goods as potential tariff targets.
The dual decisions by the WTO bring a 16-year dispute between the U.S. and E.U. over illegal subsidies provided to their respective aircraft manufacturers to an end.
Trade experts widely expected Tuesday’s announcement from the WTO and have said that this result was needed in order for the two to begin negotiations.
For Spanish olive oil producers as well as French and Spanish table olive producers, the WTO decision could mean the beginning of a process that my eventually eliminate the tariffs. However, the speed and certainty with which this process may move is not known.
“This long-awaited decision allows the European Union to impose tariffs on American products entering Europe,” European Trade Commissioner Valdis Dombrovskis said. “I would much prefer not to do so – additional duties are not in the economic interest of either side, particularly as we strive to recover from the Covid-19 recession.”
“It is my hope that the U.S. will now drop the tariffs imposed on E.U. exports last year,” he added. “This would generate positive momentum both economically and politically, and help us to find common ground in other key areas… If it does not happen, we will be forced to exercise our rights and impose similar tariffs.”
However, the European Commission’s conciliatory tone was not reciprocated by the U.S. Trade Representative Robert Lighthizer.
“While we disagree with certain aspects of its valuation, the more important point is that the arbitrator did not authorize any retaliation for subsidies other than the Washington state tax break,” Lighthizer said.
“Because Washington state repealed that tax break earlier this year, the E.U. has no valid basis to retaliate against any U.S. products,” he added. “Any imposition of tariffs based on a measure that has been eliminated is plainly contrary to WTO principles and will force a U.S. response.”
“The United States is determined to find a resolution to this dispute,” Lighthizer concluded. “We are waiting for a response from the E.U. to a recent U.S. proposal and will intensify our ongoing negotiations with the E.U. to restore fair competition and a level playing field to this sector.”
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