WASHINGTON – The United States announced yesterday that it will impose additional tariffs on French and German products as part of a long-running dispute over subsidies for aircraft manufacturers Airbus and Boeing.
The tariffs are on “aircraft manufacturing parts from France and Germany, certain non-sparkling wine from France and Germany, and certain cognac and other grape brandies from France and Germany”, which will be added to the list of products taxed since last year, according to a statement from the US Trade Representative (USTR).
It said the move was in retaliation to tariffs imposed by the European Union, which it considers unfair.
The decision is the latest twist in the 16-year trade battle over aircraft subsidies that turned increasingly sour under the protectionist instincts of President Donald Trump, and comes despite hopes for a trade truce following Joe Biden’s election.
The EU was authorised this year by the World Trade Organisation to levy additional customs duties on American products.
But Washington believes it has been penalised by the method of calculation chosen, which, according to the Trump administration, has led to an excessive amount of customs duties levied on American products.
“In implementing its tariffs... the EU used trade data from a period in which trade volumes had been drastically reduced due to the horrific effects on the global economy from the Covid-19 virus,” the USTR statement said.
“The result of this choice was that Europe imposed tariffs on substantially more products than would have been covered if it had utilised a normal period. Although the US explained to the EU the distortive effect of its selected time period, the EU refused to change its approach.”
It continued by saying that as a result, the US “is forced to change its reference period to the same period used by the EU”.
The aviation feud predates Trump, but Washington quickly embraced the opportunity to impose US$7.5 billion (RM30 billion) in tariffs against Europeans after also being cleared to do so by the WTO last year.
Washington imposed punitive tariffs of 25% on iconic EU products, such as wine, cheese and olive oil, and put a 15% tariff on Airbus planes in March. – AFP, December 31, 2020
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