White House retaliates for EU subsidies to Airbus

Whiskey from the United Kingdom, Italian cheese, French wine and Spanish olive oil are among goods from Europe that will face new United States import tariffs after the World Trade Organization ruled that the European Union had failed to abide by rules in supporting aircraft manufacturer Airbus.

As a result the WTO has given the US permission to press ahead with what will be the largest retaliatory action in its history. The WTO said the US could slap 100 percent levies on $7.5 billion of goods, but the US appears to be limiting any taxes it imposes immediately, based on how settlement talks proceed.

New aircraft from the EU will be subject to a 10 percent tariff, while other agricultural and industrial products will face a 25 percent levy.

Senior officials from the US trade representative's office say the administration will move quickly, aiming to have new levies in place by Oct 18.

The office, or USTRO, has published a list of all the items that will be subject to the additional tariffs, most of which will apply to imports from France, Germany, Spain and the UK.

German and British camera parts, industrial microwave ovens, printed books, and sweet biscuits and waffles are among those on the list. Other products to face new levies include British woollen jumpers and pullovers, and some Italian foods such as parmesan, reggiano, romano and provolone cheese, as well as fruits, clams and yogurt.

Food importers in the US told The Guardian they were dismayed by the move and said the levies would hurt the upcoming crucial Christmas sales period.

"It looks pretty bad. They hit cheese hard," said Ralph Hoffman, a vice-president of the Cheese Importers Association of America.

The USTRO said it would "continually re-evaluate these tariffs based on our discussions with the EU" and expects to enter talks in a bid to resolve the dispute.

The decision from the global trade body was in response to a long standing US complaint that certain European nations provided state aid to Airbus.

A similar WTO ruling on prohibited tax concessions and government research support for Airbus' US competitor, Boeing, will be published later this year, and would grant the EU a corresponding green light to impose retaliatory tariffs on US products.

The European Commission said it hopes to reach a settlement. "But if the US decides to impose WTO authorized countermeasures, it will be pushing the EU into a situation where we will have no other option than do the same," the Commission said in a statement.

The two rulings are expected to end a 15-year battle over subsidies to the US and European aerospace industries.

They come as China's Commercial Aircraft Corporation of China, manufacturer of C919 aircraft, eyes a share of the aerospace market that has for decades been a Western duopoly, and as the global economy is already struggling with the effects of a trade war against China launched by the Trump administration.

Stock markets closed sharply lower on Wednesday amid signs of an economic slowdown and worsening trade relations.