Aircraft and agricultural items from Europe will be subject to US tariffs in the latest round of a long legal fight. The move sets the stage for tit-for-tat trade escalation between the US and the EU.
The United States will impose tariffs on $7.5 billion (€6.8 billion) worth of European imports in retaliation for illegal EU subsidies to airplane maker Airbus.
The announcement came hours after the World Trade Organization (WTO) on Wednesday ruled on a 15-year-old case that the US could impose $7.5 billion in retaliatory tariffs in response to illegal EU subsidies to Airbus that hurt its American rival Boeing.
Washington plans to impose a 10% tariff on aircraft imported from Europe and apply a 25% import tax on other agricultural and industrial items on October 18, the Office of the US Trade Representative said in a statement.
France ready to respond ‘with sanctions’
The French government said it was prepared to retaliate, but that the response to the US tariffs must be agreed within the EU.
“If the American administration rejects the hand that has been held out by France and the European Union, we are preparing ourselves to react with sanctions,” French Finance Minister Bruno Le Maire said on Thursday.
The EU’s top trade official earlier said the bloc was considering countermeasures, but that it prefers a negotiated settlement.
“If the US decides to impose WTO authorized countermeasures, it will be pushing the EU into a situation where we will have no other option than do the same,” EU Trade Commissioner Cecilia Malmstrom said in a statement.
More than a trillion euros in trade
The European Union is the US’ largest export market, accounting for about one-fifth of all US exports. Similarly, one-fifth of EU exports go to the United States. EU-US trade in goods and services was €1,069.3 billion in 2017. The EU imported €256.2 billion in goods from the US, and exported €375.8 billion.