- The Trump administration is weighing tariffs on around $US3.1 billion of imports from the UK, Spain, Germany and France.
- Products that are being considered include cheese, planes, beer and gin, a notice published Tuesday night said.
- The move is the latest in the trade scrap between the EU and US, which began over subsidies given to major aviation companies in both nations.
- The WTO last year gave the US the green light to slap tariffs worth $US7.5 billion on the EU, mainly targeting European aviation giant Airbus.
- The WTO is expected to allow the EU to adopt a tit-for-tat response next month over US’ government support for Boeing.
- Trump’s top trade official Robert Lighthizer said “there was no valid basis” for the EU to retaliate against US goods.
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The US is considering slapping tariffs on $US3.1 billion of imports from the UK, Spain, Germany and France paving the way for a fresh trade showdown with Europe, just as fears rise that its trade deal with China is in trouble.
A notice published by the US Trade Representative on Tuesday evening said it was considering imposing tariffs on products such as aircraft, yoghurt, frozen hams, olives, beer, and gin, as well as many others.
A month long-public comment period will end on July 26, the notice said, at which point it will likely impose the tariffs.
Trade tensions between the US and Europe had previously escalated after the WTO found out that Airbus and Boeing, the world’s two largest plane makers benefitted from billions of dollars of unfair subsidies in different cases dating back to 2004. Airbus is based in Europe, while Boeing is in the US.
In October last year, the World Trade Organisation gave the US the go-ahead to levy roughly $US7.5 billion worth of tariffs on the European Union affecting aircraft parts and luxury goods in a major win for US President Trump.
The WTO is expected to allow the EU to retaliate and adopt a tit-for-tat response and give the EU similar rights in another case involving US government support for Boeing.
A carousel of retaliation
The Trump administration has used a tactic called “carousel retaliation” which is a regular rotation of goods targeted for tariffs, and Tuesday’s notice is the latest step as part of that tactic.
Bloomberg reported that Trump’s top trade official Robert Lighthizer said he is increasing tariffs to convince the EU to agree to a settlement.
Earlier this year the US increased tariffs from 10% to 15% on imports of Airbus’ aircraft and parts.
EU Trade Commissioner Phil Hogan told European trade ministers in June: “The US has stepped back from the settlement talks in recent weeks. If this remains the case, the EU will have little choice but to exercise its retaliation rights and impose our own sanctions.”
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Lighthizer said in March there was “no valid basis” for the EU to retaliate against US goods.
“We will continue to press the EU to negotiate a resolution that respects the WTO’s findings,” Lighthizer said.
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