Brussels has drawn up a list of American products it’s ready to target with extra duties, in an ongoing row over aircraft subsidies.
Tensions between the United States and Europe over trade have been cranked up after the EU listed American products it may target amid a long-running dispute over aircraft subsidies.
The European Commission has launched a “public consultation” to last until the end of May, on a range of items from frozen fish to gym equipment under consideration for extra import duties.
The transatlantic trade wrangle over Airbus and Boeing stretches back nearly 15 years.
Both the US and Europe have been found to have broken the rules, amid claim and counter-claim from either side.
Why is the EU taking action?
Brussels says it is preparing possible “countermeasures” against Washington over the ongoing Boeing dispute at the World Trade Organisation (WTO).
The commission cites in a news release the WTO’s final compliance report adopted on 11 April, which it says confirms a ruling that the US continues to subsidise the American planemaker illegally, causing significant harm to its European competitor Airbus.
“European companies must be able to compete on fair and equal terms. The recent WTO ruling on US subsidies for Boeing is important in this respect. We must continue to defend a level-playing field for our industry,” said EU Trade Commissioner Cecilia Malmström.
The EU’s move comes hot on the heels of a threat by the Trump administration to impose billions of euros worth of sanctions on EU produce, over aid granted to Airbus. It has launched its own case, claiming $11 billion (€9.7 billion) in damages.
Last week Washington drew up its own list of European items, ready to be hit with duties pending WTO arbitration.
Which US products are being targeted?
To some extent, the EU’s list of American items under consideration for sanctions mirrors the wide range of European products targeted by the US Trade Representative’s office.
The commission says that overall the items represent around $20 billion (€17.7 billion) of US exports into the EU.
Food features heavily, from fish and seafood, cheese, fruit and beans, to cooking oils, wine and spirits. Plastics and other materials are also on the list, as are bags and other luggage, tractors, and motorbike and bicycle parts.
As with the American list, helicopters are included, as are “aeroplanes and other powered aircraft of an unladen weight > 15,000 kg” – a definition which is clearly intended to target Boeing.
Video game consoles, bowling alley equipment, games arcade machines and exercising apparatus feature added for good measure.
What will this mean for business and consumers?
Despite the EU’s statement of intent, it is not certain that sanctions will be imposed on the listed American products.
Like Washington, Brussels says it is prepared to await the outcome of arbitration at the World Trade Organisation.
“The public consultation aims to gather feedback from stakeholders who may be affected by the planned measures,” Malmström’s statement said.
Businesses and other interested parties have until May 31 to make their views known.
An EU official said the US products could be substituted elsewhere to offset any price hikes to European consumers, the news website EUobserver reported.
How bad are EU-US trade relations?
The ongoing row over aircraft subsidies should be seen as part of a wider picture.
Transatlantic tensions have increased since the Trump administration imposed tariffs on European aluminium and steel imports, and threatened to slam duties on cars from Europe as well.
However, talks in Washington last July between the US president and European Commission President Jean-Claude Juncker appeared to bring a truce.
Recently, both sides have said they hope that punitive measures can be lifted, or not imposed at all.
“We do not want a tit-for-tat. While we need to be ready with countermeasures in case there is no other way out, I still believe that dialogue is what should prevail between important partners such as the EU and the US,” Cecilia Malmström, EU commissioner for trade, said.
Earlier this week, the EU and US agreed to start trade talks over industrial goods – despite French and Belgian objections. While Belgium abstained, France said no to trade negotiations because of Washington’s intention to withdraw from the Paris Climate Agreement.
The process is set to be long: although a trade deal does not need unanimity, in practice the consent of all EU member states is sought. Donald Trump, meanwhile, wants the talks to include agricultural products – something that France and other EU countries are thought likely to veto.