US threatens new tariffs on Europe over Airbus subsidies

The move marks the latest escalation of trade tensions between Washington and Brussels

The United States is threatening to slap tariffs on billions of dollars' worth of imports from Europe, in retaliation for what it calls unfair subsidies of Airbus jets. The proposed tariffs would cover not only aircraft but also wine, cheese, woolen suits, Swiss knives and other signature European products. The proposed levies were announced by President Donald Trump, who argued on Twitter that the EU has "taken advantage of the US on trade for many years" and is now time for a change.

The move comes as Boeing is under pressure since its best-selling jet, the 737 Max, has been grounded worldwide following two deadly crashes. The proposed tariffs also represent the latest salvo in a long-running dispute between European aeronautics company Airbus and its US rival Boeing. Both sides have accused the other of benefiting from unfair government subsidies. According to the Trump administration Airbus subsidies are costing US companies $11bn a year in lost market share. And if the WTO approves that figure this summer, the administration will impose the retaliatory tariffs on the EU immediately.

"This case has been in litigation for 14 years, and the time has come for action," US Trade Representative Robert Lighthizer said in a statement. Yet, he stressed that the ultimate goal is a trade agreement with Europe that would eliminate tariffs as well as unfair government subsidies.

The threats are the latest escalation in trade tensions between the US and the EU. In June last year, Washington introduced new levies on steel and aluminum imports from key allies, including bloc's Member States. Brussels responded with its own tariffs on $3.4bn worth of American goods, including whiskey, motorcycles and jeans.

Since then the US and EU have been in talks aimed at ending their disagreements over trade and eventually negotiating a trade deal. But US officials have expressed frustration and the slow pace of progress.

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