Published: Sat, April 13, 2019
Global News | By Blake Casey

Europe Condemns Overstressed US Tariff Ultimatum And Readies To Respond

Europe Condemns Overstressed US Tariff Ultimatum And Readies To Respond

The U.S. Trade Representative here on Monday proposed a range of European Union products ranging from large commercial aircraft and parts to dairy products and wine to target as retaliation for subsidies given to Airbus.

His statements were backed by French Minister of Ecologic Transition François de Rugy who said on Twitter that Paris had voted against approving negotiations between the European Union and the USA and pointed at the country's strong environmental requirements in trade agreements. "It will soon stop!" he wrote to his almost 60 million Twitter followers.

Airbus said it saw no legal basis for the US move and warned of deepening transatlantic trade tensions.

The two sides have been locked in a years-long global trade dispute over mutual claims of illegal aid to plane giants, Netherlands-based Airbus and US-based Boeing, to gain advantage in the world jet business.

The European Commission said it had started to draw up plans to retaliate over subsidies for usa planemaker Boeing.

Berlin strongly wants the limited deal in order to placate Trump and avoid USA auto tariffs that would punish Germany's cherished exports, a prospect Chancellor Angela Merkel has labelled "frightening". The result of this binding arbitration is expected this summer.

The war of tariffs broke out a year ago when Donald Trump imposed higher taxes on steel and aluminium imports.

The administration will be holding a public hearing on the proposed list of products at the International Trade Commission in Washington, DC. on May 15, 2019.

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"It's a good sign", said Mr Simon Lester, an associate director at the Washington-based Cato Institute. The proposed move comes in retaliation to subsidies that support Boeing rival, Airbus.

The U.S. announcement also comes just as Boeing is facing broad challenges within the worldwide grounding of its 737 Max industrial jet amid worries that technical issues might have contributed to two crashes in five weeks.

The World Trade Organization (WTO) has repeatedly found that European Union subsidies to Airbus have caused adverse effects to the U.S. as part of a long-running dispute.

"When I see the situation global growth is in, I don't think we can afford to have a trade conflict, even if only on the specific issues of the aircraft industry in the United States and Europe", he said.

At 0950 GMT, Airbus shares were down 1.6 percent. Embodied in John Kennedy's 1962 Atlantic Partnership speech, the core USA view then was that a united Europe would make future wars in the continent less likely; it would also create a stronger partner for the U.S. in meeting the challenges posed by the Soviet Union, and offer a more vibrant market for building trans-Atlantic prosperity. The United States is a major market for Volkswagen, Mercedes maker Daimler and BMW.

The US leader has been able to use tariffs to force the EU, Japan and other trading partners into negotiations, said Ms Wendy Cutler, a former senior US trade negotiator now at the Asia Society.

The EC has repeatedly said it will not discuss tariffs or barriers to trade in farm products.

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