Published: Wed, July 03, 2019
Markets | By Otis Pena

U.S. Proposes More Tariffs on EU Goods

U.S. Proposes More Tariffs on EU Goods

The U.S. Trade Representative's Office (USTR) is proposing new tariffs on European imports including Italian cheeses like parmesan as well as Irish and Scotch whiskies.

This supplemental list adds 89 tariff subheadings with an approximate trade value of $4 billion to the initial list published on April 12, which included tariff subheadings with an approximate trade value of $21 billion.

Washington had signaled its openness last month to working on an enforceable mechanism to govern government subsidies for aircraft production, potentially paving the way for an end to the aircraft subsidy fight.

The announcement comes at a time when the Trump administration is amping up tariffs on imports from several countries, including billions of dollars on goods from China and Mexico. The Trump administration's tariffs are pending the resolution of the Airbus-Boeing dispute, which is now being heard by the World Trade Organization.

Why is U.S. proposing tariffs?

But by expanding the list of eligible goods to include farm produce from pears to pork, Washington upped pressure on the European Union while sending supportive signals to a key domestic group, trade sources said.

The dispute concerns subsidies given to aircraft manufacturers Airbus and Boeing.

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Both nations have threatened to impose billions of dollars of tit-for-tat tariffs on planes, tractors and food after the WTO found Boeing and Airbus have received billions of dollars of subsidies.

Airbus said the USA announcement was not helpful.

Sources familiar with the WTO cases said Washington's latest salvo appeared aimed at increasing pressure on the European Union and hastening negotiations by hitting important agricultural products.

The USTR is expected to rule on the US sanctions request over the summer, although the date could fall back to September. As part of the deal, the USA would make tax incentives provided to Boeing compliant with trade rulings.

"US companies - from farmers to suppliers to retailers - are already being negatively impacted by the imposition of retaliatory tariffs". The two sides have been in a standoff over EU-based Airbus and US-based Caterpillar for almost a decade, with each country claiming that the aircraft companies are illicitly aided by government funds.

Trump has made taking aim at what he views as unfair trade practices that disadvantage the U.S. a key goal of his presidency, and tariffs are his favored tool for doing so.

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