US to impose tariffs on EU aircraft and agricultural products

The U.S. will impose tariffs on European Union goods following a victory at the World Trade Organization, according to senior officials from the Office of the U.S. Trade Representative.

The USTR plans to release a product list as early as Wednesday night, intensifying the Trump administration’s global trade fights. The duties would take effect Oct. 18. The U.S. is expected to add a 10% tariff on EU aircraft and a 25% duty on agricultural and other products, according to the officials. 

Earlier, the WTO gave the Trump administration the right to put tariffs on $7.5 billion in European goods. The U.S. had lodged complaints, first in 2004, over what it called illegal subsidies for aircraft maker Airbus by several European governments.

U.S. officials argue the EU has “no basis” to retaliate against the planned duties. The two sides are expected to meet for trade talks on Oct. 14. 

GP: Airbus A350
Eric Cabanis | AFP | Getty Images

The action escalates conflicts the Trump administration has waged around the globe as it tries to get major trade partners to change their practices. The U.S. is locked in a trade war with China as it struggles to strike a new agreement with the world’s second largest economy.

The news of a widening trade conflict follows a day of trading when major U.S. stock indexes fell more than 1.5% amid fears of a slowing economy. Investors have worried about sustained trade wars dragging on global growth and potentially pulling the U.S. into a recession. 

Airlines decried the move Wednesday. In a statement, Delta said, “Imposing tariffs on aircraft that U.S. companies have already committed to will inflict serious harm on U.S. airlines, the millions of Americans they employ and the traveling public.” Meanwhile, JetBlue said it is “concerned about the detrimental impact aircraft tariffs will have on the ability for low-cost carries like JetBlue to grow and compete.” 

Reacting to the WTO decision earlier, European Commissioner for Trade Cecilia Malmstrom said new U.S. tariffs would be “short-sighted and counterproductive.” She left the door open to the EU levying retaliatory duties.

Trump has long decried what he calls unfair trade practices by the EU. His administration increased tensions with the bloc when he put tariffs on steel and aluminum imports from Europe last year. In response, the EU slapped duties on about $3 billion in American goods, including bourbon and motorcycles.

Trump has also threatened duties on cars and auto imports from Europe. In May, the administration delayed those tariffs for up to six months. 

The U.S. sent about $319 billion in goods to the EU countries combined in 2018, making the states together the largest American export market. The U.S. imported about $488 billion in products from the EU, and the nations combined are America’s second largest supplier of goods. 

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