Breaking: WTO says U.S. can levy tariffs on $7.5 billion of EU exports over illegal subsidies to Airbus, potentially opening a new front in Trump's trade fight
By Emre Peker Updated Oct. 2, 2019 10:14 am ET BRUSSELS—The U.S. is entitled to levy tariffs on $7.5 billion of exports from the European Union over the bloc’s subsidies to Airbus SE, EADSY -0.82% the World Trade Organization said, potentially opening up a new front in the Trump administration’s global trade fight.
President Trump is poised to decide by Nov. 13 whether to levy tariffs on EU cars and auto parts, raising the threat of a rapid escalation of trans-Atlantic duties on goods worth some $100 billion. Leaders of a new EU administration, slated to take office Nov. 1, have urged Mr. Trump to avoid a trade war.Under WTO rules, Washington and Brussels may levy tariffs on any products from aircraft parts to food, alcoholic beverages, motorcycles and bicycles.
“We might very well use it, hoping we don’t have to,” EU Trade Commissioner Cecilia Malmstrom said Tuesday. She said the U.S. hadn’t engaged with an EU proposal from July for a comprehensive plan to regulate subsidies for the civil-aircraft industry. To avoid having no response until the WTO ruling, the EU is considering revoking a settlement with the U.S. from 2006 over tax exemptions for international sales structures used by Boeing and other U.S. companies known as foreign-sales corporations. That would enable Brussels to hit some $4 billion worth of U.S. exports, but also risks unraveling decades of similar trade settlements.
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