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EU trade bodies slam US decision to retain tariffs

, August 13, 2020, 0 Comments

euroThe US government said Europe had not done enough to be in compliance with WTO decisions. The EU has called for intensified efforts to resolve the trade dispute.

European trade groups reacted with regret and disappointment Thursday to a US decision to keep tariffs on EU goods in place.The French wine and spirits exports federation FEVS said the decision “will continue to heavily penalize French exporters.”

The Scottish Whisky Association said the tariff is “inflicting huge damage,” with exports down 30% since the tariff came into effect.

EU to step up efforts

On Wednesday, the US said it would maintain 15% tariffs on Airbus aircraft and 25% tariffs on more than 100 European products, despite EU efforts to resolve a 16-year-old dispute over aircraft subsidies. However, the Trump administration did not add any new tariffs despite threats to the contrary.

The European Commission, the EU’s executive, said it wanted to negotiate a solution to end the dispute.

“The Commission acknowledges the decision of the US not to exacerbate the ongoing aircraft dispute by increasing tariffs on European products,” a Commission spokesperson said, adding that the economic impacts of the coronavirus pandemic on the airline sector has made a resolution to the despute more urgent.

British Trade Secretary Liz Truss echoed the Commission’s sentiments on Thursday, saying she would step up negotiations with her US counterpart and urge Washington to drop the tariffs “as soon as possible.”

“These tariffs damage industry and livelihoods on both sides of the Atlantic and are in nobody’s interests,” Truss said in a statement.

Tariffs remain

The US had received approval from the World Trade Organization (WTO) in October 2019 to impose the tariffs as countermeasures to illegal subsidies for European aircraft manufacturer Airbus.

The US Trade Representative USTR said on Wednesday the EU was not in compliance with the WTO ruling, though the bloc suggested last month that it was.

“The EU and member states have not taken the actions necessary to come into compliance with WTO (World Trade Organization) decisions,” USTR ambassador Robert Lighthizer said in a statement. “The United States, however, is committed to obtaining a long-term resolution to this dispute.”

Airbus said it “profoundly regrets” the decision and “trusts that Europe will respond appropriately to defend its interests and the interests of all European companies and sectors, including Airbus, targeted by these tariffs.”

The Office of the United States Trade Representative (USTR) said Wednesday it would also slightly modify the list of European goods subject to the tariffs.

It will remove cheese from Greece and cookies from Great Britain, while adding jam from Germany and France. Though it maintained tariffs on other European food, wine and spirits, the USTR did not add tariffs to vodka, gin and beer as it had threatened.

The USTR said the modifications would come into effect on September 1.