WASHINGTON (AFP) – The United States is increasing tariffs on Airbus planes imported from Europe to 15 per cent, authorities announced, in a move the aerospace giant said on Saturday was “deeply” regrettable.
Friday’s decision to hike tariffs from March 18 “further escalates trade tensions between the US and the EU,” the European aerospace giant said in a statement, adding it creates “more instability for US airlines that are already suffering from a shortage of aircraft.”
The announcement from the office of the United States Trade Representative (USTR) came just days after President Donald Trump said it was time to talk “very seriously” about a trade deal with the European Union.
Duties have been at 10 per cent since October, when Washington hit European products worth US$7.5 billion (S$10.4 billion) with tariffs.
“Airbus deeply regrets USTR’s decision to increase tariffs on aircraft imported from the EU as well as the decision to maintain tariffs on goods from other sectors,” the company said, referring to products – including wine, cheese, coffee and olives – which have been taxed at 25 per cent since October.
The latest decision “ignores the many submissions made by US airlines, highlighting the fact that they – and the US flying public – will ultimately have to pay these tariffs,” it added.
The European Commission, in a statement sent to AFP about the US decision on Airbus, struck a cautious tone.
“In our view,” it said, “the focus now should be on finding a negotiated solution to the aircraft disputes on the basis of the concrete EU proposals for existing subsidies and future disciplines in this sector.”
The German finance ministry said it had taken note of the US move, and reiterated its stance on tariffs.
“Our basic position is clear: we reject any unilateral increase in customs taxes,” it said in a statement. “Customs taxes are ultimately harmful to everyone, including the USA.”
Washington imposed punitive taxes on US$7.5 billion in European products after the World Trade Organisation (WTO) gave the United States a green light to take retaliatory trade measures against the EU over its subsidies to Airbus.
Industry executives in Europe and the United States have been on tenterhooks awaiting each new announcement from trade authorities.
“It has become abundantly clear that tariffs on distilled spirits products are causing rough seas on both sides of the Atlantic,” the Distilled Spirits Council of the United States said in a statement on Friday.
The council called on authorities to withdraw 25 per cent taxes on American whiskeys in the EU, and 25 per cent taxes on liquors imported from five European countries, pointing to fears of a negative impact on the US economy and jobs.
But Trump, a real estate developer turned politician, sees tariffs as a negotiating tool.
After a trade war with China that lasted nearly two years and featured punishing reciprocal tariffs, Trump signed a “phase one” trade deal with Beijing in January, calling it a “momentous step... righting the wrongs of the past.”
He has now turned his sights to Europe as Washington brandishes the threat of taxing European auto imports, a move targeting Germany, Europe’s biggest auto exporter.
Trump wants EU member states to further open their markets to American products, particularly agricultural goods.
He has also threatened to hike tariffs on French wine – currently taxed at 25 per cent – even further unless there is a deal on a digital tax which European nations want to impose on American giants such as Amazon and Facebook.
"The longer these disputes are unresolved, the greater the threat of even more tariffs on our industry," the Distilled Spirits Council of the United States said in a statement on Friday.
"The EU has stated it may impose retaliatory tariffs this spring on US rum, vodka, and brandy in its parallel case at the WTO concerning Boeing."