The US government on Friday said it would increase tariffs on aircraft imported from the European Union to 15% from 10%, ratcheting up pressure on Brussels in a nearly 16-year transatlantic dispute over aircraft subsidies.
The US Trade Representative’s Office said it remained open to reaching a negotiated settlement with the EU on the issue, but could revise its actions if the EU imposed tariffs of its own in connection with a pair of disputes over the subsidies.
In a statement released late on Friday, USTR said it would make minor modifications to 25% tariffs imposed on cheese, wine and other non-aircraft products from the EU, including dropping prune juice from the list. It did not raise the tariff rates on those product, as it had suggested it might do in October.
The higher aircraft tariff will take effect March 18.
The US action comes as US President Donald Trump, emboldened by agreement on a Phase 1 trade deal with China, has trained his sights on restructuring the more than $1 trillion US-EU trade relationship, raising the specter of another major trade war as the global economy slows.
EU officials have said they want to negotiate with Washington but will not be bullied into submission.
European planemaker Airbus <AIR.PA> said the US move would hit US airlines already facing a shortage of aircraft and complicate efforts to reach a negotiated settlement with the European Union in the longstanding dispute.
Airbus said it would continue discussions with US customers to “mitigate effects of tariffs insofar as possible” and hoped USTR would change its position, particularly given the threat of EU tariffs on US products in its own case before the World Trade Organization.
“USTR’s decision ignores the many submissions made by US airlines, highlighting the fact that they – and the US flying public – ultimately have to pay these tariffs,” the company said in a statement.
EU officials had no immediate comment on Friday’s news.
The USTR had announced in December that it could increase tariff rates up to 100% and subject additional EU products to tariffs, following a decision by the WTO that EU launch aid to Airbus continued to harm the US aerospace industry. The WTO in October had awarded Washington the right to impose tariffs on $7.5 billion of annual EU imports in its case against Airbus. Washington then slapped 10% tariffs on most European-made Airbus jets and 25% duties on products ranging from cheese to olives and single-malt whisky, from Oct. 18.