European Union regrets new US tariffs in Airbus-Boeing spat

The EU regretted on Thursday the US decision to slap more tariffs on French and German products as part of spat over aircraft manufacturers Airbus and Boeing.

Brussels complained that Washington had “unilaterally” disrupted ongoing talks and said it would seek a solution to the row with the incoming administration, which takes office on January 20.

The European Commission said it, “regrets that the United States has chosen to add further EU products to its retaliation list in the WTO Airbus case on aircraft subsidies.”

“The EU will engage with the new US Administration at the earliest possible moment to continue these negotiations and find a lasting solution to the dispute,” it said.

The decision is the latest twist in the 16-year trade battle over aircraft subsidies that turned increasingly sour under the protectionist instincts of US President Donald Trump, and comes despite hopes for a trade truce following Joe Biden’s election.

The EU was authorised this year by the World Trade Organization (WTO) to levy additional customs duties on American products.

But Washington believes it has been penalised by the method of calculation chosen, which, according to the Trump administration, has led to an excessive amount of customs duties levied on American products.

The aviation feud predates Trump, but Washington quickly embraced the opportunity to impose $7.5 billion in tariffs against Europeans after also being cleared to do so by the WTO last year.

Washington imposed punitive tariffs of 25 percent on iconic EU products such as wine, cheese and olive oil and put a 15 percent tariff on Airbus planes in March.

The European Union will seek a swift resolution of a 16-year battle over aircraft subsidies with incoming US president Joe Biden, saying that new US tariffs have damaged talks with the Trump administration.

The Commission, which coordinates trade policy for the 27-nation European Union, said on Thursday that the US action had “unilaterally” disrupted ongoing negotiations about respective state subsidies for European planemaker Airbus and its US rival Boeing.

“The EU will engage with the new US administration at the earliest possible moment to continue these negotiations and find a lasting solution to the dispute,” it said in a statement.

The office of the US Trade Representative (USTR) said on Wednesday it was adding aircraft components such as fuselages and wings, and wines and brandy from France and Germany onto a list of goods subject to tariffs, responding to what it said was unfair EU retaliation.

Both Washington and Brussels have won cases at the World Trade Organization, the former allowed to impose tariffs on $7.5 billion of EU goods and the latter extra duties on $4 billion of imports from the United States.

The USTR said the EU tariffs, imposed in November, had been distorted by basing them on trade depressed by the COVID-19 pandemic, and because Britain had been cut from the calculation even though it had applied the measures throughout 2020.

In a statement, Airbus said Europe should respond “appropriately”.

The new tariffs are part of a 16-year transatlantic battle over aircraft subsidies that both U.S. and European negotiators had recently talked about ending. They will apply from Jan. 12, eight days before Biden succeeds Trump as U.S. president.

Aircraft are already covered by U.S. tariffs, but the addition of components closes a loophole that had allowed Airbus planes assembled in Mobile, Alabama, to be sold in the United States free of tariffs. As a result, those aircraft are likely to be uncompetitive in the U.S. market.

Britain and Spain were spared additional tariffs.

Britain said its decision to suspend retaliatory tariffs against the United States from Jan. 1, part of its new-found freedom outside the European Union, was already paying off.

Meanwhile, The world began ushering in the New Year Thursday, with pandemic controls muting celebrations for billions of people eager to bid farewell to a virus-ridden 2020.

After a grinding year that has seen at least 1.7 million people die from Covid-19, fresh waves of infection have sparked renewed lockdowns and forced would-be revellers to extend their 2020 tradition of watching events from the sofa.

The eagerly awaited first seconds of 2021 fell on the Pacific nations of Kiribati and Samoa from 1000 GMT, with the uninhabited Howland and Baker Islands the last to tip over into the New Year, 26 hours later.