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Wednesday, September 28, 2022

WTO grants EU approval to impose tariffs on $4 bln worth of US products

The World Trade Organization (WTO) on Tuesday gave the European Union (EU) permission to impose tariffs on $4 billion worth of American products annually in retaliation for illegal subsidies given to the U.S. plane maker Boeing, a move that could result in levies on American airplanes, agricultural products and other goods, according to The New York Times report.

The decision, which stems from a 16-year fight before the global trade body, follows a parallel case that the United States brought against Europe over subsidies to its largest plane maker, Airbus.

Last year, the Trump administration imposed tariffs on European planes, wine, cheese and other products after the WTO gave the United States permission to retaliate on up to $7.5 billion of European exports annually.

It remains to be seen whether the new tariffs will ultimately persuade the United States and Europe to come to a negotiated settlement that would lift the levies, or merely inflame relations and result in higher costs on businesses and consumers on both sides of the Atlantic.

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The European Union has repeatedly appealed to the United States to remove its tariffs, but American officials say Europe has not taken the necessary actions to stop its Airbus subsidies.

The tariffs will not go into effect immediately. The European Union needs to request authorization from the WTO to impose the levies, which it can do at an Oct. 26 meeting at the earliest.

The European Commission last year issued a preliminary list of American products that it could choose to tax, including aircraft, chemicals, citrus fruit, frozen fish and ketchup.

The tariffs, when American companies are reeling from the coronavirus pandemic, would be especially painful for Boeing, which is already struggling from a pair of devastating crises.

Boeing, like Airbus, announced plans this summer to cut more than 10 percent of its global workforce amid a steep decline in travel, which has forced airlines to delay and scale back plans to buy planes. Both Boeing and Airbus plan to cut more than 30,000 jobs in all.

Delta Air Lines, whose fleet includes hundreds of planes from both manufacturers, said on Tuesday that it had scaled back plans to buy $5 billion worth of aircraft through 2022.

Just under a million people were screened at federal airport checkpoints on Monday, a decline of more than 60 percent from the same day last year.

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