WASHINGTON • The United States said on Friday it will increase the tariff rate imposed on aircraft imported from the European Union to 15 per cent from 10 per cent on March 18.

The move is part of a long-running spat in which the US has sought to penalise the EU for offering illegal subsidies to Airbus that harmed American aircraft maker Boeing.

The US Trade Representative (USTR) said in the statement on Friday that it is leaving duties on certain other European goods such as Scotch and French wine at 25 per cent and will make minor changes to the previously released product list.

"Airbus deeply regrets the 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. The latest decision also "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 German Finance Ministry said it has taken note of the move by the US 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 US."

The US is deploying a trade tactic known as carousel retaliation, whereby governments periodically shift duties and tariff rates on different groups of goods in order to increase pain and uncertainty for exporters.

On Oct 18 last year, Washington imposed the original 10 per cent duties on Airbus aircraft and 25 per cent tariffs on a range of European consumer exports, such as cheese and Spanish olives.

Fifteen years ago, the US filed a dispute against the EU's subsidies for Airbus, and the EU filed a counter-suit shortly thereafter. The World Trade Organisation (WTO) has subsequently ruled that both the US and EU were guilty.

The dispute came to a head last autumn when the WTO said the US could legally impose tariffs on US$7.5 billion (S$10.4 billion) of European exports in retaliation for illegal government aid to Airbus.

The award was the largest in WTO history - almost twice as large as the previous record of US$4.04 billion set in 2002.

At the time, the US held off on penalising certain luxury goods such as cognac and handbags, with administration officials saying their goal in imposing the duties was to persuade the EU to negotiate a settlement.

But a transatlantic trade peace has proved elusive and US officials say the EU's overtures have been unacceptable.

BLOOMBERG, AGENCE FRANCE-PRESSE