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U.S. Warns Of New Tariffs On Europe Over Airbus Subsidies

Apr 9, 2019

Updated at 12:41 p.m. ET

The Trump administration is preparing to slap tariffs on billions of dollars' worth of imports from Europe, in retaliation for what it calls unfair subsidies of Airbus jets. The proposed tariffs would cover not only aircraft but also wine, cheese, woolen suits and other signature European products.

President Trump touted the proposed tariffs on Twitter, arguing the European Union has "taken advantage of the U.S. on trade for many years."

The proposed levies represent the latest salvo in a long-running dispute between Airbus and its U.S. rival Boeing. Both sides have accused the other of benefiting from unfair government subsidies. The World Trade Organization has ruled in separate cases against both Airbus and Boeing.

The Trump administration estimates that Airbus subsidies are costing U.S. companies $11 billion a year in lost market share. If the WTO approves that figure this summer, the administration will be ready to impose retaliatory tariffs immediately.

"This case has been in litigation for 14 years, and the time has come for action," U.S. Trade Representative Robert Lighthizer said in a statement.

The move comes as Boeing is under pressure. Its best-selling jet, the 737 Max, has been grounded worldwide following two deadly crashes. As Aviation Week's Graham Warwick recalled, the 737 Max was hastily developed in response to a competing jet from Airbus.

The Trump administration has already imposed tariffs on imported steel and aluminum from Europe and elsewhere and the president has threatened to impose tariffs on European cars.

Lighthizer says the ultimate goal is a trade agreement with Europe that would eliminate tariffs as well as unfair government subsidies.

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