The European Union has threatened to slap $20bn (£15.3bn) worth of tariffs on American goods in retaliation for possible tariffs from the US, as the long-running conflict over aircraft subsidies continues.
Read more: US threatens tariffs on $11bn of EU goods
The European Commission today said it could tariff everything from rum and ketchup to tractors and helicopters, after the World Trade Organisation (WTO) found the US to be continuing subsidies to aeroplane manufacturer Boeing.
Earlier this month the US threatened to tariff $11bn worth of EU goods, which it said was in line with the economic damage inflicted on America by European subsidies to aeroplane and defence company Airbus.
However, the EU hopes it can negotiate a trade deal with the US that will avoid the need for tariffs which could threaten its manufacturers. To this end member states agreed to launch trade negotiations with the US earlier this week.
The two economic powerhouses have been locked in a battle over aeroplane company subsidies for 15 years, with both sides repeatedly complaining to the WTO about economic damage.
The Commission, which is the body in charge of the EU’s trade policy, has today submitted a request that the WTO decide the exact appropriate level of tariffs that it could apply to US goods in relation to the dispute over Boeing subsidies.
EU trade commissioner Cecilia Malmstrom said: “European companies must be able to compete on fair and equal terms. The recent WTO ruling on US subsidies for Boeing is important in this respect. We must continue to defend a level-playing field for our industry.”
“But let me be clear, we do not want a tit-for-tat,” she said. “While we need to be ready with countermeasures in case there is no other way out, I still believe that dialogue is what should prevail between important partners such as the EU and the US, including in bringing an end to this long-standing dispute.”
Earlier today it was revealed that the EU’s trade in goods surplus with the US grew in January and February compared to a year earlier, a development that could further raise tensions with the Trump administration.
Meanwhile, the EU’s trade in goods deficit with China increased, driven by a 10 per cent increase in imports from America’s rival.