Trump says he'll put tariffs on $11B in European Union goods

US Prepares to Impose More Tariffs on EU Goods in Response to Airbus Subsidies

A day earlier, the U.S. Trade Representative proposed targeting a list of EU products for tariffs, ranging from large commercial aircraft to dairy products and wine, as retaliation for European aircraft subsidies. Trade Representative's office released on Monday a preliminary list of European Union products it would tax including a number of products in the aviation sector, including Airbus aircraft.

"The amount is largely exaggerated and in any case will be defined by the WTO and not the U.S".

Economists say the Trump team appears to want to use the ruling not merely to help Boeing but to heighten pressure on trading partners like Germany with which the USA has a trade deficit.

U.S. trade representative, Robert Lighthizer, said: "This case has been in litigation for 14 years, and the time has come for action".

Mr Lighthizer's office said it would "identify products of the European Union to which additional duties may be applied until the European Union removes those subsidies" under Section 301 of the Trade Act of 1974.

The European Union and the United States have for years disputed each other's reciprocal subsidies to Airbus and Boeing, long predating Trump's 27-month presidency. "It will soon stop!"

The World Trade Organisation ruled in May previous year Airbus had received illegal funding for its A380 and A350 which cost Boeing sales and the U.S. administration said it would wait until the WTO gives the go-ahead this summer before imposing the tariffs.

The EU and the United States are already engaged in a trade battle which has seen extra tariffs placed on goods imported to both regions.

The European Commission said on Monday (18 February) that the EU will respond in a "swift and adequate manner" to the possibility that the United States may impose tariffs on European cars, following the submission of a U.S. report on whether vehicle imports represent a national security threat. Many of its key suppliers lost between 0.7 percent and 1.2 percent, though it could have been worse and most of Europe's big bourses clawed back to level.

"Get ready for more tit-for-tat scrapping to follow", said John Woolfitt of London brokerage Atlantic Markets. "The figure quoted by USTR is based on US internal estimates that have not been awarded by the WTO".

In a ruling published in June 2017, the WTO said the U.S. had brought 28 of 29 programs into compliance, but agreed with Brussels that Washington had not taken "appropriate steps to remove the adverse effects or. withdraw the subsidy" in the case of Washington state. The United States is a major market for Volkswagen, Mercedes maker Daimler and BMW.

President Donald Trump's administration has made punitive tariffs something of a signature, imposing many and frequently threatening them as a negotiation tactic.

Fabiana Fedeli at Robeco sees the latest moves as tactical. In the end, more tariffs could further raise consumer prices in the United States and weigh on the global economy at a time when it's showing alarming signs of stress as the US wages a broader trade war with China.

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