After World Trade Organization (WTO) ruling on aircraft subsidies last year, the United States levied additional tariffs on a wide range of European Union (EU) goods, which took effect on Oct. 18, a move that has fueled trade tensions between the two sides.
According to an earlier statement from the Office of the U.S. Trade Representative (USTR), new airplanes and other aircraft from Britain, France, Germany and Spain are subject to additional tariffs of 10 percent, while Scotch whiskies, cheese, olives, yogurt and sweaters from certain countries are among the products to be hit by an additional tariff of 25 percent.
In an announcement in February, the Office of the USTR increased the additional tariffs on aircraft from 10 percent to 15 percent, and also modified the list of other products subject to additional 25 percent duties.
In the latest statement released Wednesday, the Office of the USTR said it is removing from the tariff list certain products from Greece and Britain and adding an equivalent amount of trade from France and Germany.
Calling the changes "modest," the Office of the USTR said the amount of products subject to countermeasures will remain unchanged at 7.5 billion U.S. dollars and the tariff rates will remain unchanged at 15 percent for aircraft and 25 percent for all other products.
The WTO had given the United States permission to levy tariffs on 7.5 billion dollars of European exports, the amount commensurate with the adverse effects suffered by Airbus' U.S. rival Boeing in terms of lost sales and impeded deliveries of its aircraft.
"The EU and member states have not taken the actions necessary to come into compliance with WTO decisions," said USTR Robert Lighthizer, adding that the United States will launch a new process to try to reach a long-term solution.
Refuting the USTR's accusation, Airbus said it regretted the U.S. decision to keep in place additional tariffs on Airbus aircraft.
"Airbus profoundly regrets that, despite Europe's recent actions to achieve full compliance, USTR has decided to maintain tariffs on Airbus aircraft -- especially at a time when aviation and other sectors are going through an unprecedented crisis," Airbus spokesman Clay McConnell said in a statement, as reported by CNBC.
"Airbus trusts that Europe will respond appropriately to defend its interests and the interests of all the European companies and sectors, including Airbus, targeted by these tariffs," the spokesman added.
The 16-year-long dispute is expected to further escalate later this year when the EU is expected to win WTO approval to hit back with its own tariffs over subsidies for Boeing.
In 2004, the United States filed a case with the WTO, accusing the EU of providing illegal subsidies to Airbus in various forms. The EU has since filed a similar case over allegedly illegal U.S. subsidies to Boeing. The WTO has ruled that both the United States and the EU have provided illegal subsidies for their respective airlines.
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