The Office of the United States Trade Representative (USTR) presented a set of new tariffs on European products that could amount to $4 billion. This is the last row in the dispute between Airbus and Boeing over allegedly illegal subsidies.
The list of 89 products is varied, ranging from pork sausages to whiskey, cheese, but also copper and iron. In its statement, the USTR says the tariffs will “enforce U.S. rights in the World Trade Organization (WTO) dispute against the European Union (EU) and certain EU member States regarding EU subsidies on large civil aircraft.” The products account for about $4 billion in commercial value. They will be added to a similar list published on April 12, 2019, by the Trump administration, which weighed approximately $21 billion.
At the heart of this decision is a conflict that dates back to 2006, and has been going back and forth ever since. The United States and the European Union accuse each other of providing illegal public aid to their respective aircraft manufacturers, Boeing and Airbus.
So far, the WTO has ruled that both manufacturers have been receiving unfair subsidies. The EU was found to have unfairly supported the development of two Airbus programs, the late A380, and the A350. As for Boeing, the manufacturer received unjustified tax breaks from the U.S. authorities. The WTO is now in the process of estimating the scale of potential trade sanctions. Both parties estimate that subsidies harmed their business by more than $10 billion per year.