WASHINGTON: The US government on Wednesday (Aug 12) said it would maintain 15 per cent tariffs on Airbus aircraft and 25 per cent tariffs on other European goods, despite moves by the European Union to resolve a long-standing dispute over aircraft subsidies.
US Trade Representative Robert Lighthizer (USTR) said the EU had not taken actions necessary to come into compliance with World Trade Organization decisions, and Washington would initiate a new process to try to reach a long-term solution.
Lighthizer's office said it would modify its list of US$7.5 billion of affected European products to remove certain goods from Greece and Britain, adding an equivalent amount of goods from Germany and France.
Airbus said it "profoundly regrets" the US decision to keep tariffs in place on its aircraft.
Last month, Airbus said it would increase loan repayments to France and Spain in a "final" bid to reverse US tariffs and jog the United States into settling a 16-year-old dispute over billions of dollars of aircraft subsidies.
Trade groups are bracing for an escalation of the row in the autumn when the EU is expected to win WTO approval to hit back with its own tariffs over subsidies for Boeing .
Airbus said in a statement it "trusts that Europe will respond appropriately to defend its interests and the interests of all the European companies and sectors, including Airbus, targeted by these tariffs".
Boeing said it hoped "the EU and Airbus will engage promptly in meaningful negotiations with the U.S. to address the full scope of their noncompliance and finally bring this case to an end".
USTR in October 2019 imposed 25 per cent tariffs on some European Union food, wine and spirits in retaliation for EU subsidies on large aircraft. The tariffs hit French wine, Italian cheese and single-malt Scotch whisky, as well as cookies, salami, yogurt, olives from France, EU-produced pork sausage and German coffee.
USTR initially imposed 10 per cent tariffs on Airbus aircraft but hiked that to 15 per cent in March.
Despite a push by members of Congress, USTR declined to drop 25 per cent tariffs on EU food, wine and spirits but it also did not add tariffs to vodka, gin and beer as it had threatened.
The Wine & Spirits Wholesalers of America criticised the decision, which did not lift tariffs on wine, and said it would maintain pressure on a sector desperately in need of relief.
However, the Distilled Spirits Council of the United States said continuing tariffs on EU beverage alcohol products would cause additional harm to hospitality businesses "that are already suffering."
No comment was immediately available from EU diplomats in Washington.