EU puts tariffs on US but hopes for change with Biden

The European Union said Monday it would impose tariffs on up to USD 4 billion worth of US goods and services over illegal aid for plane maker Boeing - but expressed hope that trade ties would improve once President Donald Trump leaves office.

European trade ministers agreed on the move a few weeks after international arbitrators gave the EU the green light for such punitive action.

The World Trade Organization had deemed illegal some U.S. support for Boeing - which is a bitter rival to Europe's Airbus - and said the EU could make up for that with a limited amount of penalties on US trade.

“Regrettably, in spite of our best efforts due to the lack of progress from (the) US side, we can confirm that the European Union will later today exercise our rights and impose counter-measures awarded to us by the WTO,” EU Commission Executive Vice-President Valdis Dombrovskis said. The tariffs will enter force on Tuesday.

A year ago, the WTO ruled in a similar fashion in favor of the United States, allowing it to slap penalties on EU goods worth up to $7.5 billion - including Gouda cheese, single-malt whiskey and French wine - over European support for Boeing rival Airbus.

After Trump also imposed tariffs on EU steel and aluminum and threatened punitive duties on cars, the Europeans had hoped that he would hold fire on the tariffs related to the Airbus-Boeing dispute. But having repeatedly failed to achieve a negotiated solution, the EU decided to announce punishment of its own.

“We call on the US to agree that both sides drop existing counter-measures with immediate effect so that we can quickly put this issue behind us,” Dombrovskis said. He declined to provide precise details of the tariffs, which were to be made public in the official EU journal later Monday, but said they would hit agricultural and industrial products, among others.

“We are not escalating anything, we are exercising our rights,” Dombrovskis said, adding that the EU is “mirroring the U.S. approach” in the kinds of duties it is imposing.

German Economy Minister Peter Altmaier said “this step was logical," and that most of the 27 EU member countries agree.

Asked why the EU didn’t wait until Trump leaves office, Altmaier said: “The U.S. tariffs have already been valid for over a year. We won’t know until about February or March exactly who in the new administration has the power to speak for this important area, so a solution had to be found now in the hope that it can prevent a further escalation.”