THE move comes after the World Trade Organization (WTO) ruled that the US can impose annual tariffs on as much as $7.5 billion worth of European exports in retaliation for illegal government subsidies to aircraft maker Airbus.
The largest award in WTO history follows 15 years of litigation.
The dispute was triggered from the fact that France, Germany, Spain and Britain offered Airbus subsidies for the development of some of its most recent and advanced models, such as the A350 and A380.
A list provided by the US Office of the Trade Representative (USTR) shows that “the bulk of the tariffs are being applied to imports from France, Germany, Spain, and the United Kingdom – the four countries responsible for the illegal subsidies,” according to a USTR press release.
The new tariffs on certain European Union exports will commence on October 18.
While the WTO authorised the US to increase 100 per cent levies on $7.5bn of goods, Washington is limiting the rise, at least for now.
New aeroplanes from the EU will be subject to a 10 per cent levy, while other agricultural and industrial products will face 25 per cent tariffs. The latter category includes whiskies, pullovers and bed linens from the UK; coffee, knives and machinery from Germany; French wine and olives and Spanish olive oil.
France was the first country to warn that it will take steps if the US makes the new duties effective. “Evidently, we are foreseeing retaliation measures,” said French government spokesperson Sibeth Ndiaye. The dispute could potentially trigger a tariff war between the EU and the US, although the White House has left the door open to negotiations.