Subsidies for airbus: trump threatens the eu

The U.S. president announces additional tariffs of $11 billion on imports from Europe because of government aid to the aircraft manufacturer.

In addition to aircraft parts, swimwear from the EU is also on Trump’s list of additional tariffs Photo: imago-images/blickwinkel

US President Donald Trump is threatening the EU with significant additional tariffs over state aid to aircraft manufacturer Airbus. The EU has been taking advantage of the US on trade for many years, Trump tweeted Tuesday. He said the World Trade Organization (WTO) had found that EU aid to Airbus was detrimental to the US. "This will stop soon," Trump wrote. He announced additional tariffs on EU products of $11 billion (9.8 billion euros).

Before Trump’s tweet, U.S. Trade Representative Robert Lighthizer had published a 14-page preliminary list of products from the EU to which these additional tariffs would apply. The list includes aircraft, aircraft parts, cheese, olive oil, wine, binoculars and swimwear. Lighthizer said the U.S. goal is to reach an agreement with the EU to end all illegal subsidies on large passenger aircraft.

The EU Commission said the U.S. action was "grossly excessive." It is now considering a counter-attack on state aid to Boeing. To this end, the EU will turn to the competent arbitrator of the WTO. The WTO is the decisive body for international trade matters. Subsidies violate WTO rules under certain conditions.

The current U.S. push is not related to the trade dispute with the EU instigated by Trump, nor to the economic problems facing U.S. aircraft manufacturer Boeing after the crash of two new planes.

The U.S. and EU have accused each other of subsidizing their aircraft manufacturers for years. The WTO has found state aid violations on the part of both the U.S. and the EU. However, the judges did not give figures on the damage caused.

The U.S. last suffered a defeat in the dispute before the WTO at the end of March. The WTO judges ruled that the U.S. had not scaled back tax breaks for Boeing to the extent required in earlier rulings. A further ruling is expected in the summer.

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