Lebanese Ministry of Information
Private
For more than a decade, the US and EU have accused each other of supporting their home aviation markets with research grants, tax breaks, and other aid. In March 2020, the dispute escalated with Washington imposing higher tariffs up to 15% on European airlines “Airbus” and airplane parts imported from the European Union.
Last month, the US also threatened to impose duties on EU’s goods and announced a list of 30 products that could be subjected to new tariffs such as chocolate, olives, gin and beer, noting that the US annually imports around $3.1 billion worth of these goods. According to the notice, the new selected items could be subjected to tariffs of as much as 100%.
Dairy produce, some types of meat from the EU and UK, books, tools and fruit have also been subjected to tariffs since October 15th.
Beyond the food and beverage items, most of the list is consisted of business tools like metal stamping and punching equipment. The World Trade Organization (WTO) has already taken the US’s side in the dispute that began in 2004. In 2018, the WTO came to a conclusion that the European Union helped its European-based airline “Airbus” with illegal subsidies which hurt sales of US-based Boeing’s wide-body jets. Following that decision, the United States began to put tariffs on European goods.
As part of this dispute, the United States has already imposed 15% to 25% tariffs on other European goods worth $7.5 billion.
The WTO also found out that Washington State granted Boeing improper tax breaks which the state removed earlier this year, but the EU is still threatening to act accordingly in response to the earlier decision.
Phil Hogan, Europe’s Trade Commissioner said on Monday that Washington had rejected attempts to settle the dispute. He told the European Parliament’s trade committee that the European Union will act decisively and strongly if they don’t get the expected outcome from the United States to finalize this 15-year-old dispute.
Mr. Hogan also criticized recent US national security investigations against EU goods. The investigations known as 232 investigations cover products like transformers, steel nails and mobile cranes.
“This is totally unacceptable,” Mr. Hogan said “If these investigations go further, the European Union will have to stand together and act as well.
The EU stated that the next round of US-imposed tariffs could exceed what is allowed by the WTO. “It creates uncertainty for companies and inflicts unnecessary economic damage on both sides of the Atlantic,” said the EU in its statement. “This is particularly the case as companies are now trying to overcome the economic difficulties in the aftermath of the Covid-19 crisis.”
According to the EU, the only way to resolve this dispute is through negotiations and they have already made “concrete proposals” to settle the aircraft issue.
People and businesses on both sides are concerned this dispute would escalate and turn into a trade war causing great threats for both the EU’s and the US’s industries.
Directorate of Lebanese Studies and Publications
Romy Harfouche
