EU Challenged the US Subsidies to Boeing

The World Trade Organization resolution on US subsidies to Boeing this week is posited as an essential catalyst for transatlantic trade relations. It may well make the previously frustrating negotiations between Washington and Brussels ill-natured. Or, on the contrary, raise the tariff pulse.

Showing off his diplomacy, EU Trade Commissioner Valdis Dombrovskis signaled his intention. He tried to immediately engage with the United States again on Twitter. He stated that otherwise, they would be forced to defend their interests. And also respond proportionately to the possibility of taxing US products worth $4 billion.

His American counterpart, Trade Representative Robert Lighthizer, was much more incisive. He indeed showed his commitment to seek a solution to this dispute. Still, he recalled that the EU and its member states had not taken the necessary actions to comply with a similar ruling for Airbus’s subsidies.

Lighthizer stated that the US would initiate a new process with the EU. In an effort to reach an agreement that allows the elimination of additional tariffs on these products. Moreover, that would generate growth and employment on both sides of the Atlantic. Besides, he claimed that, because the state of Washington repealed the tax breaks for Boeing earlier this year, the EU has no valid basis for retaliating against any US product.

The US maintained tariffs on EU products

Last August, the Office of the Trade Representative, USTR, mentioned that the European Commission previously announced amendments to the contracts to support the Airbus A350 XWB in France and Spain. However, it did not implement the WTO recommendations to withdraw the aeronautical giant’s subsidies. 

That is why it maintained the 15% tariffs on Airbus aircraft. In fact, it also kept a 25% on European products for a total value of 7,500 million dollars. There were “modest” changes in the list of affected goods.

Since last October, wines with an alcohol content of less than or equal to 14 percent and in containers of 2 liters or less have been taxed an additional duty of 25%. Particularly if they come from the UK, Spain, France, and Germany.

The European Wine Companies, CEEV, and 17 other organizations from the US and the EU representing the retail trade, and distributors and producers of wine, spirits, and beer felt distraught. They addressed a letter to the North American and European authorities last week. They urged them to bet on the negotiation and reach an agreement that allows eliminating additional tariffs on these products. Which would generate growth and employment on both sides of the Atlantic.