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EU imposes tariffs on $4bn of US goods in Boeing row

·2 min read
A Boeing 737 MAX plane is seen during a media tour of the Boeing plant in Renton, Washington, U.S. 7 December 2015
A Boeing 737 MAX plane is seen during a media tour of the Boeing plant in Renton, Washington, U.S. 7 December 2015

The European Union is moving forward with a plan to hit $4bn (£3bn) of American goods with tariffs as punishment for US subsidies for Boeing.

The taxes, authorised by the World Trade Organization last month, go into effect on Tuesday and affect items such as tractors, ketchup and orange juice.

The EU said it still hoped to settle the fight, which saw the US impose tariffs on European products last year.

A trade official said Joe Biden's election could help "reboot" talks.

EU Trade Commissioner Valdis Dombrovskis said the EU wanted to see both sides remove their respective tariffs, which are a result of a long-running feud over state support provided to plane-maker Boeing and European rival Airbus.

"Removing these tariffs is a win-win for both sides, especially with the pandemic wreaking havoc on our economies," said Mr Dombrovskis.

"We now have an opportunity to reboot our transatlantic co-operation and work together towards our shared goals."

US Trade Representative Robert Lighthizer, who has served as America's top trade official under Donald Trump, said the US was "disappointed" by the move.

"The alleged subsidy to Boeing was repealed seven months ago," he said in a statement. "The EU has long proclaimed its commitment to following WTO rules, but today's announcement shows they do so only when convenient to them."

Long-running fight

The fight over aircraft subsidies for Boeing and European rival Airbus pre-dates Mr Trump's time in office, but trade tensions between the two traditional allies have grown particularly strained during his tenure.

Last year, the WTO said the US was justified to retaliate against the EU on $7.5bn worth of goods for support granted to Airbus, prompting the US to place tariffs on items such as certain whiskeys, wines and cheese.

The WTO made a similar ruling in October in favour of the EU over support offered to Boeing.

In recent months, both sides have taken steps they say correct the offending programmes. But Mr Dombrovskis said there had been no progress toward a settlement.

"We have made clear all along that we want to settle this long-running issue. Regrettably, due to lack of progress with the US, we had no other choice but to impose these countermeasures," he said.

US aircraft imported to Europe will face tariffs of 15%. The EU said it would apply border taxes of 25% to a list of other items, which includes tractors, tobacco ketchup, orange juice, cheddar cheese and sweet potatoes.