U.S. rejects EU calls to drop 15% tariffs on Airbus aircraft

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European Union Commission acknowledged the United States’ decision not to increase tariffs on European products and said it wanted to renegotiate existing ones, a proposition immediately rejected by the U.S.

U.S. Trade Representatives said they would modify a list of European products affected by the tariffs, but would not remove the 15% tariff imposed on Airbus aircraft. Airbus said it “profoundly” regreted the decision.

July 2020 saw the largest European aircraft manufacturer increasing loan payments to France and Spain in an attempt to reverse the tariffs imposed by the Trump administration as a retaliation for government subsidies. The measure was employed following 2019 World Trade Organization’s (WTO) decision to deem government subsidies unlawful. Initial tariff of 10% for Airbus aircraft was increased to 15% in February 2020.

According to US Trade Representative Robert Lighthizer the recent actions the EU took to come in compliance with WTO rulings were not sufficient, allowing the U.S. to persist with the tariffs. 

Airbus made its case claiming that tariffs would cause harm to U.S. airlines following current economic slowdown and the grounding of Boeing 737 MAX airplane. The firm hopes for backing by the EU, which could come in the form of its own tariffs on Boeing on the basis of subsidies and tax cuts received from the U.S. government

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