In the latest development in a tit-for-tat trade dispute over aircraft subsidies, the European Union announced Monday that it would move forward with tariffs on $4 billion in U.S. goods.
The World Trade Organization authorized the new tariffs in October.
A preliminary list of American goods that could be subject to the new levies includes frozen fish, vegetables, tobacco, leather goods, wine, and aircraft.
The Wall Street Journal estimates that the new tariffs could come into effect as soon as Monday.
“The U.S. has imposed tariffs following the WTO ruling in the Airbus case,” EU Trade Commissioner Valdis Dombrovskis said Monday, according to the Wall Street Journal. “Now, we have a WTO ruling also in our Boeing case, allowing us to impose our tariffs and that’s what we are doing.”
The new tariffs are the latest iteration of a 16-year trade dispute between the United States and Europe over European subsidies to French aircraft giant Airbus. The U.S. said those subsidies unfairly benefited Airbus at the expense of American businesses, and the E.U. then filed its own complaint over subsidies the U.S. gave to Washington-based Boeing. The WTO has now allowed both the E.U. and the U.S. to impose tariffs on each other in an attempt to help claw back profits that were lost due to subsidies on each side. Last year, the U.S. imposed its own tariffs on European goods including cheese, wine, and olive oil after the WTO gave it permission to tax up to $7.5 billion in European exports each year.
What To Watch For
Investors are now looking to President-elect Joe Biden for more stability in international trade, especially after President Trump’s instigation of a bitter trade war with China and his withdrawal from global trade organizations. Biden has pledged to repair relationships with allies on trade to present a unified front against China, but don’t expect him to take quick action on rolling back Trump-era trade moves any time soon. His first priorities will be a new coronavirus relief package and infrastructure investments at home.