Distilled spirits, wine and Boeing jets are among the products on which the European Union can impose tariffs totaling $3.99 billion, the World Trade Organization said. The announcement follows another WTO decision authorizing the U.S. to impose $7.5 billion on Airbus SE jets and other European products.
The dispute over aircraft subsidies is the longest trade dispute in the World Trade Organization’s history.
Robert LIghthizer, the U.S. Trade Ambassador, said the EU has “no lawful basis to impose tariffs” because U.S. subsidies for Boeing have already been repealed. “Any imposition of tariffs based on a measure that has been eliminated is plainly contrary to WTO principles and will force a U.S. response,” he said.
Announcement of the potential levies brought a swift response from the National Association of Beverage Importers and Distilled Spirits Council of the U.S.
“Now that the battle lines are drawn and the strength of each other’s armaments is know, NABI urges the U.S. Trade Representative and the Trade Commissioner of the European Union to agree to 180-day truce for real settlement negotiations to move forward and conclude successfully,” NABI President Robert Tobiassen said.
DISCUS expressed hope that “instead of further escalation, the U.S. and the EU will come back to the negotiating table and agree to the immediate and simultaneous removal of tariffs on U.S. and EU distilled spirits with a commitment not to impose any additional tariffs on other distilled spirits. The EU previously indicated it may impose tariffs on U.S. rum, brandy and vodka in this dispute. The escalation of tariffs on the distilled spirits sector, by either the U.S. or EU, will only increase harm to our industry, which is unrelated to the trade dispute.
“The spirits industry and hospitality sector are facing incredible economic harm due to the mandatory closings of restaurants, bars and distillery tasting rooms in response to the outbreak of COVID-19. An immediate restoration of duty-free access for all distilled spirits is essential to returning our industry to supporting jobs on both sides of the Atlantic.”
Despite tough talk in press releases by both the USTR and EU, Tobiassen saw “some hope” noting both sides had offered reconciling comments. USTR said the U.S. has shown “restraint” by not imposing tariffs on the entire $7.5 billion and saying the U.S. is determined to find a solution to the civil aircraft subsidies that would restore “fair competition and a level playing field to this sector.”
The EU Trade Commissioner noted that retaliatory tariffs aren’t in the interest of either side, “particularly as we strive to recover from the Covid 19 recession.”