EU needs to stop taking advantage of the US

President Donald Trump's administration on Monday said it would impose tariffs on US$11 billion in imports from the EU because of the European aid.

The threatened USA tariffs are in response to subsidies received by aircraft maker Airbus and target a host of European products including helicopters, aircraft parts and cheese.

A simmering transatlantic trade row risked escalating on Tuesday after the US threatened to impose tariff counter-measures of up to $11.2 billion on a host of European products.

"It will soon stop!" he wrote.

The U.S. Trade Representative's office released late Monday a list of European Union products it would tax in anticipation of a ruling by the World Trade Organization this summer. The suggested tariff amount is subject to an arbitration at the World Trade Organization, which is expected to be issued this summer.

The dispute dates back to 2004, when the US first accused the European Union of subsidizing aircraft produced by Airbus and brought it to the attention of the WTO.

Trump is an outspoken fan of tariffs, calling them "the greatest" in a July 24 tweet.

In the U.S. case, it allows the Office of the U.S. Trade Representative to collect public comments on the potential tariffs.

The US filed its first WTO complaint against illegal subsidies provided by the European Union to Airbus 15 years ago.

The case, which has been grinding its way through the World Trade Organization for nearly 15 years, is approaching the final stages of arbitration.

The president gave no timetable for the move, which comes amid an escalating trade row after the U.S. initially threatened the tariffs on Monday in response to subsidies received by aircraft maker Airbus. "The amount is largely exaggerated and will, in any case, be defined by the WTO and not by the United States", according to Ohler.

Moody's said on Tuesday potential USA tariffs on imported autos and parts represented a significant risk to global growth and would hinder economic momentum in Germany, Japan and Korea.

The European Commission said on Monday (18 February) that the EU will respond in a "swift and adequate manner" to the possibility that the U.S. may impose tariffs on European cars, following the submission of a USA report on whether auto imports represent a national security threat.

Washington's row with Brussels over subsidies to Airbus, a long-time competitor to United States aerospace giant Boeing, dates back to 2004, when the U.S. first appealed to the World Trade Organisation for arbitration.

"The new tariffs. are a drop in the ocean as a percentage of the overall trade between the USA and Europe and we view them as a negotiating tool to set the tone for what the really important negotiations are, namely autos", she said.

Whether the US gets the legal right to implement the new tariffs will depend on a ruling by the WTO, an organization based in Geneva that sets the rules for global commerce and settles disputes.

The action comes as US aerospace giant Boeing grapples with the fallout from two deadly crashes involving its 737 Max planes, which have been grounded globally.

  • Wendy Palmer