The World Trade Organization (WTO) on Oct. 2 backed a U.S. request to impose $7.5 billion in tariffs on European imports in response to charges that illegal subsidies were granted to European airplane manufacturer Airbus by numerous E.U. governments. The U.S. first lodged its complaint back in 2004.
The U.S. Trade Representative (USTR) late on Oct. 2 published a final list of E.U. products that will be subject to U.S. tariffs, but nitrogen fertilizers were not mentioned. An initial list was published by the USTR last April, but a supplemental list released in July included some fertilizer products, including anhydrous ammonia, urea, UAN, ammonium sulfate, and ammonium nitrate (GM July 12, p. 1)
The ruling is the largest arbitration award in WTO history, and represents a significant development in the 15-year long Airbus-Boeing battle in that it is the first time the U.S. has been cleared under international trade law to impose countermeasures on E.U. imports. In response to the ruling, the E.U. threatened retaliation to any U.S.-imposed tariffs.
“If the U.S. decides to impose WTO authorized countermeasures, it will be pushing the E.U. into a situation where we will have no other option than do the same,” Brussels said in a statement.
The planned tariffs and duties that are scheduled to take effect on Oct. 18 include a 10 percent tariff on large civil aircraft from Frances, Germany, Spain, and the U.K., and 25 percent levies on a wide range of other items, including Irish and Scotch whiskeys, wine, olives and cheese, certain pork products, butter, and yogurt from various European nations. In addition to fertilizer, leather goods were also omitted from the final list after being included in earlier versions.
The USTR has asked the WTO to schedule an Oct. 14 meeting to formally authorize the tariffs. Citing a senior U.S. trade official who briefed reporters on Oct. 2, Bloomberg reported that the goal of the Trump administration in imposing retaliatory duties is to persuade the E.U. to reach a negotiated settlement.