EU says concerned at threat of fresh US tariffs

Shipping containers are stacked at the Port of Los Angeles in California. PHOTO: REUTERS

BRUSSELS (AFP) - The European Commission expressed concern on Wednesday (June 24) at a US threat to impose punitive taxes on European imports over a dispute over US aircraft makers Boeing and Europe's Airbus.

A document released late on Tuesday from the US Trade Representative says it is considering levying taxes of up to US$3.1 billion (S$4.3 billion) on European products over the fairness of subsidies to Airbus.

The USTR document listed products from France, Germany, Spain or Britain, ranging from olives to decaffeinated coffee, as possibly subject to the new tariffs.

The proposed measures would be "very damaging", said a Commission spokesman.

"It creates uncertainty for companies and inflicts unnecessary economic damage on both sides of the Atlantic.

"This is particularly the case as companies are now trying to overcome the economic difficulties in the aftermath of the Covid-19 crisis.

"By potentially targeting new products, the US is increasing this damaging impact due to the cost of new disruptions to supply chains for the product potentially subject to new duties," said the spokesman.

"We are concerned that this might even go beyond what is authorised under the WTO," he added.

Washington and Brussels have been squabbling for years over government subsidies to Airbus, and in 2019 the World Trade Organisation authorised the US to impose up to 100 percent in taxes on US$7.5 billion in European goods.

The EU has threatened its own tariffs on Boeing, but in an April letter to USTR Robert Lighthizer, EU Trade Commissioner Phil Hogan said he saw the coronavirus pandemic as an opportunity to defuse the tensions.

President Donald Trump, who faces a tough re-election battle in November, took office promising to close the yawning US trade deficit with the rest of the world.

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