Trump issued a tweet, "The World Trade Organization believes that the EU's subsidies to Airbus have had a negative impact on the United States. Now, the United States will impose tariffs on EU products worth $11 billion." Airbus’s illegal subsidies have been arguing for a long time. “This case has been litigated for 14 years and it is time for action.â€
On April 9, local time, US President Trump issued a tweet on Twitter, saying that it would tax a $11 billion EU commodity. "The World Trade Organization believes that the EU's subsidies to Airbus have had a negative impact on the United States. Now, the United States will impose tariffs on EU products worth $11 billion," he wrote.
The EU also said that it is preparing to launch a counterattack against the US subsidies for Boeing. Trade disputes between Europe and the United States caused market concerns. After the release of Trump's tweets, the major European stock indexes, including France's CAC40 and Germany's DAX index, saw an increase.
"14 years of litigation, the action"
The trade dispute between the United States and Europe is mainly an extension of the 14-year struggle between Boeing and Airbus.
US Trade Representative's office (USTR) to give a list of EU products April 8, involving large commercial aircraft, parts and components as well as dairy products, wine and so on. Documents show, USTR intends to impose tariffs against the EU about $ 11 billion, in order to "punish" its manufacturer Airbus European aircraft subsidies.
US Trade Representative's office on behalf of Wright Abashidze claimed that "the proceedings of this case has been for 14 years, now it is the time for action."
Since 2004, the EU and the United States have been arguing over their illegal subsidies for Boeing and Airbus and have submitted the case to the WTO.
March 28, WTO Appellate Body on "Airbus subsidies to Boeing v. United States case (DS353))" to make a final ruling, saying the United States to Washington state tax breaks in the form of subsidies to Boeing illegal and lead to the Airbus A320neo and A320ceo five single-aisle aircraft losses in sales activities. EU Trade Commissioner Malm Strom subsequently issued a statement entitled "The EU get the final victory in Boeing WTO disputes", the Appellate Body has now indicate the final ruling of the case, and confirmed in the award despite over-ruling before the WTO, US subsidies to Boeing continues. US Trade Representative's office (USTR) believes that the ruling was "a major victory for the United States" because it believes the final ruling to comply with the earlier ruling, and now only one illegal subsidies that Washington each year to $ 100 million of tax relief for Boeing .
The WTO in 2018 also said that it will assess the US requirements for sanctions against illegal subsidies for air passengers in the EU. The United States expects the value of these subsidies to be $11.2 billion per year.
European and American trade negotiations is a heavy blow
Although the market has long anticipated the WTO's decision, the US response is still unexpected. "The ultimate goal is to reach an agreement with the EU to end all large civil aircraft subsidies that are inconsistent with the WTO (ruling)," Wright Heze said in a statement.
European Commission officials said that the level of tariffs allowed in Washington would be set by arbitrators appointed by the World Trade Organization, while the proposed figures for the United States were exaggerated.
After the final ruling of the WTO, the EU is also expected to develop a similar list of tariffs on US goods and services within a few months. After the United States announced the decision to levy tariffs, European Commission officials then said that the EU is preparing its tariff list.
The official said that in a similar dispute with Boeing, the EU will require the arbitrator appointed by the WTO to determine the EU's right of retaliation. “The EU is still open to discussions with the United States, provided that these discussions are not accompanied by preconditions and are intended to achieve a fair outcome,†he said.
As can be seen from USTR's $11 billion preliminary tariff retaliation list, the list is mainly for European countries with subsidies to Airbus such as France, Germany, Spain and the UK, and Europe for wine and cheese. product. This will be a big blow to the ongoing European and American trade negotiations.
It is understood that due to the huge differences in agriculture, especially the French side, the start of the free trade negotiations between the US and Europe "three zeros" (zero tariffs, zero non-tariff barriers and zero subsidies) has been delayed. Wright Heze also said at a hearing on March 12 that the US-European negotiations were stuck because of agricultural problems. "The United States cannot talk to Europe about an agreement without agriculture, and the European side's view is that they cannot talk about an agreement with agriculture," Wright Heze said.
As the "originator" of trade friction between Europe and the United States, Airbus believes that the United States imposes tariffs "completely unreasonable." Airbus said that the EU will soon be allowed to impose higher tariffs on the United States, adding that "this will lead to unnecessary trade tensions, and the only reasonable solution is to solve the problem through negotiations."
Boeing said, "Boeing supports the US trade representative and its team to continuously strive to balance the competitive environment of the global aircraft market." "I hope that the draft tariff list will force the EU to abide by the WTO's past ruling."
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