US announce punitive tariffs on EU products in aviation dispute

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The United States on Wednesday announced punitive tariffs on some products from France and Germany in retaliation for a long-running aircraft manufacturing dispute with the European Union.

The products subject to the tariffs will include “aircraft manufacturing parts … certain non-sparkling wine … and certain cognac and other grape brandies from France and Germany,” a statement from the US trade representative said.

The measures were in response to tit-for-tat tariffs on US products worth 4 billion dollars (3.37 billion euros) imposed by the EU in November following a World Trade Organization (WTO) ruling.

The US accused the bloc of “unfairly increasing the amount of retaliation” by using data from a period with “drastically reduced” trade volumes due to the coronavirus pandemic.

The representative also accused the EU of excluding Britain from trade volume calculations to its advantage.
“The effect of this was to unfairly increase the retaliation for the 52 days in which the UK remained within the EU for tariff purposes,” the statement said. “The EU needs to take some measure to compensate for this unfairness.”

The statement added that details of the new tariffs would be provided in a forthcoming Federal Register notice.
The announcement is the latest move in a 15-year-long dispute between Brussels and Washington over state support for the world’s two largest aircraft companies, the European Airbus consortium and its US rival Boeing.

The WTO’s mid-October ruling allowed the EU to impose tariffs on US imports to retaliate against unfair aircraft subsidies.

In a similar case, the WTO authorized the US in 2019 to impose tariffs on EU products worth up to 7.5 billion dollars in response to illegal subsidies to Airbus.

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