The World Trade Organization (WTO) recently granted permission for the European Union (EU) to impose tariffs on American goods. European officials are considering the implementation of the tariffs in response to the U.S. subsidies that aircraft manufacturer Boeing received. The WTO indicated that the EU could levy tariffs on up to $4 billion worth of American goods. The decision is just the latest development in an issue that has been going on for 16 years. U.S. officials expressed disappointment in the WTO decision.
“While we disagree with certain aspects of its valuation, the more important point is that the arbitrator did not authorize any retaliation for subsidies other than the Washington State tax break,” United States Trade Representative Robert E. Lighthizer said in a news release. “Because Washington State repealed that tax break earlier this year, the EU has no valid basis to retaliate against any U.S. products. Any imposition of tariffs based on a measure that has been eliminated is plainly contrary to WTO principles and will force a U.S. response.”
Last year, the U.S. imposed retaliatory duties on $7.5 billion worth of products from the EU in regard to the ongoing dispute. The European Commissioner for Trade Valdis Dombrovskis said they hope the recent WTO decision will cause the U.S. to eliminate the tariffs. A preliminary list of U.S. products that could be taxed was released by the European Commission last year. The list includes a variety of products including tractors, chemicals, handbags, and aircraft. Also included on the list is a variety of agricultural goods such as table grapes, prunes, citrus fruits, and various nuts.
Dombrovskis also noted that he has been working with USTR Lighthizer in working out a solution. The EU does not want to impose tariffs but will do so if necessary. Lighthizer also stated that the U.S. is working toward a more amicable solution to the trade dispute. “We are waiting for a response from the EU to a recent U.S. proposal and will intensify our ongoing negotiations with the EU to restore fair competition and a level playing field to this sector,” Lighthizer noted.