US threatens to place tariffs on $4 billion worth of EU goods

The US proposes new tariffs on EU goods after a battle between Airbus and Boeing over subsidies.

Just days after the US settled a tariff war with China, the US may escalate another tariff conflict. The US could impose more tariffs on EU (European Union) imports after a subsidy dispute between two of the world’s largest airplane manufacturers: American Boeing and European Airbus.

How Boeing-Airbus dispute could lead to more US-EU tariffs

The conflict between Airbus and Boeing started in 2004. The US first filed a claim with the World Trade Organisation (WTO) alleging that Airbus received $22 million in unauthorised subsidies from the EU. The EU countered with a complaint that Boeing gained illegal subsidies from the US government.

The US Trade Representative’s office said in a statement that it‘s proposing tariffs on $4 billion worth of EU products ‘in order to enforce US rights in the World Trade Organisation (WTO) dispute against the European Union (EU) and certain EU member States regarding EU subsidies on large civil aircraft’.

The EU and Airbus respond to US tariff threat

A European Union spokesperson responded to the US in a statement.

‘The European Union remains open for discussions with the United States, provided these are without preconditions and aim at a fair outcome,’ said the spokesperson.

Airbus responded to the US Trade Representative’s office by saying the WTO should decide who wins the dispute between Airbus and Boeing.

‘This only adds to the trade tensions but in reality, does not change anything. The level of retaliation is up to the WTO to define, not the USTR [US Trade Representative] or Boeing,’ said Airbus.

How could EU tariffs affect US businesses?

The US already imposed tariffs in April on $21 billion worth of European goods, including steel and aluminum. The EU responded by placing tariffs on $3 billion worth of US products. The US also considered higher taxes on imported European cars.

Some of the products that could be impacted by new tariffs include meat, cheese, coffee, and whisky. While the US may impose tariffs to retaliate against the EU, The Distilled Spirits Council of the United States denounced the possible tariffs as potentially being harmful to US businesses.

‘These tariffs, if imposed, will have numerous unintended negative consequences on US jobs, US consumers and on US companies that export to the European Union,’ said the council in a statement.

‘US companies — from farmers, to suppliers to retailers — are already being negatively impacted by the imposition of retaliatory tariffs by key trading partners on certain US distilled spirits resulting from other trade disputes, and these additional tariffs will only inflict further harm,’ added the council.

The WTO will make a final ruling about Airbus subsidies later this year.

IGA, may distribute information/research produced by its respective foreign affiliates within the IG Group of companies pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the research is distributed in Singapore to a person who is not an Accredited Investor, Expert Investor or an Institutional Investor, IGA accepts legal responsibility for the contents of the report to such persons only to the extent required by law. Singapore recipients should contact IGA at 6390 5118 for matters arising from, or in connection with the information distributed.

The information/research herein is prepared by IG Asia Pte Ltd (IGA) and its foreign affiliated companies (collectively known as the IG Group) and is intended for general circulation only. It does not take into account the specific investment objectives, financial situation, or particular needs of any particular person. You should take into account your specific investment objectives, financial situation, and particular needs before making a commitment to trade, including seeking advice from an independent financial adviser regarding the suitability of the investment, under a separate engagement, as you deem fit.

Please see important Research Disclaimer.

European Central Bank meeting

Learn about how the ECB meeting affects interest rates and price stability ahead of the next announcement on 24 October 2019.

  • How might the next meeting affect the markets?
  • What are the key rate decisions to watch?
  • Why is the Governing Council announcement important for traders?

Live prices on most popular markets

  • Forex
  • Shares
  • Indices
Sell
Buy
Updated
Change
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Sell
Buy
Updated
Change

Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 15 mins.

Sell
Buy
Updated
Change
-
-
-
-
-
-
-
-
-
-
-
-
China 300
-
-
-
-

Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 20 mins.

The Momentum Report

Get the week’s momentum report sent directly to your inbox every Monday for FREE. The Week Ahead gives you a full calendar of upcoming key events to monitor in the coming week, as well as commentary and insight from our expert analysts on the major indices to watch.

For more info on how we might use your data, see our privacy notice and access policy and privacy webpage.

You might be interested in…

Find out what charges your trades could incur with our transparent fee structure.

Discover why so many clients choose us, and what makes us a world-leading provider of CFDs.

Stay on top of upcoming market-moving events with our customisable economic calendar.