U.S. hikes tariffs on EU aircraft to 15 pct amid subsidy dispute

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WASHINGTON, Feb. 14 (Xinhua) — The United States is increasing the additional duty rate imposed on aircraft imported from the European Union (EU) to 15 percent from 10 percent, effective from March 18, the Office of U.S. Trade Representative (USTR) announced Friday.

After World Trade Organization (WTO) ruling on aircraft subsidies last year, the United States levied additional tariffs on a wide range of EU goods, which took effect on Oct. 18, a move that has fueled trade tensions between the two sides.

In the newly released statement, USTR Robert Lighthizer said he has determined to revise the action based on a review of the Section 301 action and following public comments.

Aside from hiking the tariffs for certain large civil aircraft, he is also modifying the list of other products of “certain current and former EU member states” subject to additional 25 percent duties, effective March 5.

Prune juice, concentrated or not, was removed from the list, while butchers’ or kitchen chopping or mincing knives have been added to the action.

According to an earlier statement from the Office of the USTR, new airplanes and other aircraft from Britain, France, Germany and Spain are subject to additional tariffs of 10 percent, while Scotch whiskies, cheese, olives, yogurt, and sweaters from certain countries are among the products to be hit by an additional tariff of 25 percent.

Earlier last year, the WTO had given the United States permission to levy tariffs on 7.5 billion U.S. dollars of European exports, the amount commensurate with the adverse effects suffered by Airbus’ U.S. rival Boeing in terms of lost sales and impeded deliveries of its aircraft.

Following U.S. announcement of tariff action, former EU Trade Commissioner Cecilia Malmstrom had said “we regret the choice of the U.S. to move ahead with tariffs.”

Noting that the EU and the United States have both been found in breach of WTO rules, Malmstrom said “this step leaves us no alternative but to follow through in due course with our own tariffs in the Boeing case, where the U.S. has been found in breach of WTO rules.”

In 2004, the United States filed a case with the WTO, accusing the EU of providing illegal subsidies to Airbus in various forms. The EU has since filed a similar case over allegedly illegal U.S. subsidies to Boeing. The WTO has ruled that both the United States and the EU have provided illegal subsidies for their respective airlines.

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