Tariffs on aircraft made in Europe will be increased by the United States as its president Donald Trump tries to exert more pressure on the European Union in the long running dispute over government subsidies of private airplane makers.
The tariffs on airplanes made in Europe would be increased from the current 10 per cent to 15 per cent applicable from March 18, said the United States Trade Representative late on Friday. It also added a 25 percent tax on French and German butcher and kitchen knives while removing prune juice from for the list of taxed goods.
The trade representative said that the total annual value of the goods under tariffs would remain at $7.5 billion as it was earlier.
The tariffs on European made aircraft date back to 15 years when the US had filed a complaint at the World Trade Organization (WTO) against subsidies by multiple European governments to the European plane maker Airbus which put the American plane maker Boeing. The European Union had also filed a similar complaint against the US of subsidizing Boeing.
In relation to that case, the US was granted permission by the WTO in October last year to impose tariffs to recover losses to the tune of $7.5 billion of European exports annually. It is expected that the tariffs would continue until such time that the European Union removes its subsidies or a negotiated agreement is reached between the two governments.
The trading relationship between the EU and the US has been fraught in recent time and this tariff is another irritant in the list of disputes between the two traditional trading partners.
One of the recent points of dispute between the two was France’s announcement of a digital tax which is likely to impact most large American technology companies. Further, there is also discontent among European officials over the US virtually paralyzing the WTO by not agreeing on new appointments for a key appeals panel of the world body
However there have also been efforts to better trade relations on the part of both sides despite the disputes. Both sides apparently have scaled down their ambitions following the announcement of plans for a comprehensive trade deal in 2018. Reports have suggested the officials of both sides could come to a settlement of a “mini-deal” with focus on a few selected industries and sectors.
She was expecting to reach a trade agreement that she could sign with the United States “in a few weeks,” said the European Commission president, Ursula von der Leyen, in January while at a news conference with President Trump in Davos, Switzerland. However there have been very little details of such a trade agreements.
Analysts said that now that the US has imposed the tariff on European aircraft, it could put more pressure on European officials to come to an agreement on trade.
(Adapted from NYTimes.com)