
Trump and Juncker
US President Donald Trump (L) with European Commission President Jean-Claude Juncker (R) at the G20 summit in Hamburg, Germany in July 2017. Source: Felipe Trueba / EPA / EFE
The European Union has been preparing for a possible trade war with the US in the ongoing dispute over Boeing subsidies. This week, the European Commission published a preliminary sanctions list of US products amounting to almost $20-billion (€17.7-billion).
Earlier this month, a ruling by the WTO found that US subsidies to Boeing were causing significant harm to Airbus.
The list is wide ranging and includes many agricultural products such as coffee, fruit and tobacco, as well as reaching into other spheres like aviation. The potential tariffs could hit a variety of consumer goods including chocolate, wine and spirits, ketchup, lobsters, coal, bicycle pedals, video games, shovels, medical dressings, handbags, and tractors.
Poor environmental standards in the US and concerns over agricultural goods were also factors in the EU's decision.
European businesses have until the end of May to bring forward any objections they have to items included on the list.
An EU spokesperson said that the US goods on the lists could easily be substituted from other countries to avoid price rises. "There are other sources of supply possible in the world, so normally, globally, the supply of European consumer or the global value chain should not be dramatically affected," he said, whilst adding that China also manufactures aircraft.
The EU announcement came on the same day that the bloc announced its intention to "strengthen its political partnership" with Latin America and the Caribbean and to increase trade and investment in the region; a move that is unlikely to be celebrated in Washington DC, which has long seen its southern neighbours as part of its direct sphere of influence.
It also comes the week after the EU signed a joint statement with China agreeing on future trade and a continued multilateral approach. China has also been experiencing trade issues with the US.
The US and the EU agreed to start trade talks on Monday looking at cutting industrial levies.
The sanctions list also comes amid other issues since President Trump has come to power such as US threats to begin sanctioning EU firms working in Cuba, as well as clashes over cars, steel and aluminium, and natural gas.
The US has also launched a case of its own against Airbus in which is has claimed $11-billion (€9.7-billion) in damages.
Whilst making preparations for a worst-case scenario with the possible sanctions list, the EU stated that it is open for a negotiated settlement.
EU Trade Commissioner Cecilia Malmström said: ”European companies must be able to compete on fair and equal terms. The recent WTO ruling on US subsidies for Boeing is important in this respect. We must continue to defend a level-playing field for our industry. But let me be clear, we do not want a tit-for-tat... The EU remains open for discussions with the US, provided these are without preconditions and aim at a fair outcome.”
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