A dispute between the USA and the EU over whether or not the EU offers its aircraft manufacturer, Airbus Industries, unfair subsidies has been rumbling on for 14 years. The EU, for its part, is unhappy with the relationship between America and its major aircraft producer, Boeing. The dispute will be adjudicated by WTO in the next few months and retaliatory measures could be applied, depending on that decision.
The US Trade Representative, Robert Lightizer noted: "This case has been in litigation for 14 years, and the time has come for action. The administration is preparing to respond immediately when the WTO issues its finding on the value of US countermeasures. Our ultimate goal is to reach an agreement with the EU to end all WTO-inconsistent subsidies to large civil aircraft. When the EU ends these harmful subsidies, the additional US duties imposed in response can be lifted."
An earlier ruling suggested that the US has a case. It found that the EU and four governments involved with Airbus have yet to comply with a ruling on contested subsidies. The US is suggesting that it might target $11 billion worth of trade, a figure EU sources regard as inflated.
The US is looking at tariffs on a wide range of goods including wine and cheese to olive oil and motorbikes as well as more targeted items such as helicopters, and aviation components such as fuselages and undercarriage parts (specifically from France, Spain, Germany and the UK).
EU sources said: "The EU is confident that the level of countermeasures on which the notice is based is greatly exaggerated. The amount of WTO authorised retaliation can only be determined by the WTO-appointed arbitrator. In the parallel Boeing dispute, the determination of EU retaliation rights is also coming closer and the EU will request the WTO-appointed arbitrator to determine the EU's retaliation rights. The EU remains open for discussions with the US, provided these are without preconditions and aim at a fair outcome."
The USA is currently embroiled in a number of trade wars, most notably with China, which have yet to provide the easy US gains that President Trump predicted for them.