US increases tariffs on European aircraft in ongoing subsidy dispute

The U.S. government announced on Friday that it would be increasing tariffs on aircraft imported from the European Union from 10% to 15%, escalating a long-standing dispute over aircraft subsidies that has spanned nearly 16 years. This move is seen as a way to put pressure on Brussels to come to a negotiated settlement on the issue.

The U.S. Trade Representative’s Office stated that it is open to reaching a resolution with the EU but will adjust its actions if the EU imposes tariffs of its own in response to the subsidies dispute. The higher aircraft tariff is set to take effect on March 18.

This decision comes as President Donald Trump looks to restructure the U.S.-EU trade relationship, following the Phase 1 trade deal with China. The European Union has expressed a willingness to negotiate but will not be bullied into submission.

Airbus, the European planemaker, expressed concerns that the increased tariffs will impact U.S. airlines, which are already facing a shortage of aircraft. The company is working with U.S. customers to mitigate the effects of the tariffs and hopes that the USTR will reconsider its position.

The Wine & Spirits Wholesalers of America and the Distilled Spirits Council of the United States have both voiced opposition to the tariffs on European-origin wine and spirits, citing potential job losses and declining exports. They are urging U.S. and EU trade officials to resolve the disputes for the benefit of consumers on both sides of the Atlantic.