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U.S. to Slap EU With $7.5 Billion in Punitive Tariffs Starting Friday, With WTO’s Final Okay

October 14, 2019, 8:13 PM UTC

The Trump administration on Friday will start levying punitive tariffs on $7.5 billion worth of European Union goods, as the World Trade Organization on Monday formally gave the go-ahead for the United States to impose the trade sanctions, in retaliation for the European plane maker Airbus receiving illegal subsidies.

The move by the trade body’s dispute settlement body was largely a formality after the long-awaited Oct. 2 ruling by a WTO arbitration panel. For that ruling to be blocked, every country including the United States that attended the settlement body’s meeting Monday would have had to reject it.

The record $7.5 billion decision found that the European bloc and member states Britain, France, Germany, and Spain failed to remove improper financial subsidies for Airbus that hindered sales by U.S. rival Boeing, in violation of WTO rules.

The U.S. tariffs on European imports range from aircraft to clothes, wine, Scotch whisky, olives, and cheese. The harshest sanctions hit Britain, France, Germany, and Spain—members of the consortium that makes Airbus airliners, although the affected countries are across Europe. 

The measures will make a range of European products more costly for U.S. consumers. Although the USTR could apply 100% tariffs on affected products, “at this time” the Trump administration said it’s limiting punitive duties to 10% on large civil aircraft and 25% on agricultural and other products. The U.S. has the authority to increase the tariffs, or change the targeted products.

At the same time, the EU is seeking WTO approval to impose tariffs on billions of dollars of U.S. exports in a parallel dispute over subsidies to America’s Boeing, Airbus’s rival for domination of the world aircraft market.

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