US threatens tariffs on EU wine and cheese

The Trump administration has opened up fresh trade tensions with the EU after threatening to impose tariffs worth $11bn on goods ranging from helicopters to wine and cheese.

US trade representative (USTR) Robert Lightizer said the move was in retaliation for subsidies to European aeroplane manufacturer Airbus said to have caused “adverse effects” to the US.

The list of EU products that could face new levies runs from swordfish, stilton and wine to motorcycles and large commercial aircraft.

But Airbus said it saw no legal basis for the US move while EU sources told the Reuters news agency that it was preparing for possible retaliation.

The EU and US have been battling for more than a decade over parallel claims over billions in illegal subsidies to aviation giants Airbus and America’s Boeing.

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The latest move by the USTR marks an escalation of tensions, though Mr Lightizer said the ultimate goal was to reach an agreement with the EU to end all subsidies to large civil aircraft that do not comply with World Trade Organisation (WTO) rules.

“When the EU ends these harmful subsidies, the additional US duties imposed in response can be lifted,” he said.

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Wine was among the list of products listed by the US trade representative

The WTO said last year that it would evaluate a US request to slap billions of dollars worth of sanctions on European products, in response to a ruling on illegal subsidies.

The US has estimated the value of those subsidies as worth $11bn (£8.4bn) in trade, though that figure has been challenged by the EU.

The USTR said it would announce a final product list once the WTO had evaluated its claims, which it is expected to have done by this summer.

Airbus spokesman Rainer Ohler said the amount announced by the US was “largely exaggerated”.

He said a ruling last week by the WTO against tax breaks for Boeing should allow the EU to seek “even greater counter-measures”.

Mr Ohler added: “All this is leading to unnecessary trade tensions and shows the only reasonable solution in this long trade dispute is a settlement.”

The latest announcement comes after the US last year imposed tariffs on the EU’s steel and aluminium products.

Europe has hit back with levies on American products such as bourbon whiskey, motorcycles and jeans.

Mr Trump has ramped up the use of tariffs or the threat of tariffs in relations with Washington’s trade partners, including Europe, Mexico and China – a tactic that has left global markets jumpy about the impact on global growth.

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