EU Says New US Tariffs Over Airbus to Hugely Harm Both Sides, Warns of Tit-for-Tat Spiral

BRUSSELS (Pakistan Point News / Sputnik - 26th June, 2020) A new batch of US sanctions on EU goods as part of an aircraft subsidy dispute would deal a "huge" blow to both sides of the Atlantic and might force the bloc to respond in kind, which would launch a harmful spiral of retaliatory steps, a European Commission spokesperson told Sputnik.

On Tuesday, the US Trade Representative's office said that the country weighs new tariffs on $3.1 billion in exports from Europe as part of the longstanding Boeing-Airbus subsidy dispute in the World Trade Organization (WTO). Among those 30 items that may be hit with up to 100 percent tariffs are beer, cheese, chocolate, olives, yogurt, aircraft, machinery and other goods.

"After the COVID-19 confinement and ensuing economic crisis, this is not what is needed on both sides of the Atlantic, the economic damage would be huge, the cost of the increases would ultimately be paid by the American consumer and the importing businesses in the US would suffer.

Finally, Europe could also retaliate, which would create the wrong spiral," the spokesperson said.

The commission believes that the "only way forward" is to settle the dispute through negotiations.

"It is not normal that food, drinks and luxury goods manufacturers have to bear the impact of a disagreement on an aircraft manufacturing and subsidies excesses issue," spokesperson added.

In October, the US was given a go-ahead to impose levies on $7.5 billion worth of EU goods by the WTO, which ruled in Washington's favor in the battle over Airbus subsidies.

Washington has since slapped 15 to 25 percent tariffs on $7.5 billion goods from EU countries, including civil aircraft and food products.

In December, the WTO authorized more tariffs after finding that the EU has not ended the illegal subsidies.