Ana Swanson and Milan Schreuer
c.2019 The New York Times Company
WASHINGTON — The World Trade Organization will grant the United States permission to impose tariffs on the European Union as part of a prolonged scuffle over subsidies given to European plane maker Airbus, European officials said Monday, a move that is likely to exacerbate trade tensions across the Atlantic.
The ruling, to be published in the week of Sept. 30, is the global trade body’s final decision in a 15-year-old dispute over the government assistance that Europe provides to its major plane manufacturer. It will clear the way for the United States to impose tariffs on European goods, worsening tensions that have become strained under President Donald Trump’s confrontational approach.
The WTO still must authorize a specific dollar amount that the United States can recoup through tariffs, but the U.S. trade representative has already prepared a list of up to $21 billion worth of products that it can tax, including airplanes, fish, wine, leather purses, carpets and clocks.
The trade body opened the door for the Trump administration to impose billions of dollars in retaliatory sanctions in May, when it ruled that Europe had illegally subsidized Airbus to the detriment of its American competitor Boeing.
The ruling could become fodder for Trump’s growing trade fight with the European Union, which he has accused of weakening its currency and criticized for exporting more goods into the United States than it buys.
Trump has already rankled European leaders by imposing tariffs on steel and aluminum imports and threatening to tax European automobiles before the end of the year. His administration’s attempt to negotiate a trade deal with the bloc has also faltered as the two sides continue to disagree about which industries, like agriculture, should be included in any deal.
The WTO is also considering a parallel case that the European Union has brought against the United States for providing subsidies to American plane maker Boeing. The EU claims that the United States provided $20 billion in illegal subsidies to the American plane-maker, including through Washington state tax breaks. A decision in that case is expected early next year and could authorize European retaliation against the United States.
The EU has already drawn up its own list of $20 billion of American imports it plans to tax after the Boeing ruling is announced, including aircraft, food and chemicals.