Airbus: Higher US tariff on EU planes raises tensions

PARIS－European aircraft producer Airbus said on Saturday that the United States' decision to increase tariff on aircraft imported from the European Union further escalated trade tensions between the US and the EU.

The decision of the Office of US Trade Representative, or USTR, "further escalates trade tensions between the US and the EU, thereby creating more instability for US airlines that are already suffering from a shortage of aircraft", said the European plane maker in a statement.

"Airbus deeply regrets USTR's decision to increase tariffs on aircraft imported from the EU as well as the decision to maintain tariffs on goods from other sectors," the company said. The decision "ignores the many submissions made by US airlines, highlighting the fact that they－and the US flying public－will ultimately have to pay these tariffs", it added.

The USTR issued a notice on Friday, saying the US was increasing the additional duty rate imposed on aircraft imported from the EU to 15 percent from 10 percent, effective from March 18.

Duties have been at 10 percent since October, when Washington hit European products worth $7.5 billion with tariffs.

This "further escalation complicates efforts to find a negotiated outcome to this dispute," said Airbus. "This is regrettable."

Airbus said it would continue to push for a negotiated settlement to this dispute.

Following US announcement of tariff action, former EU Trade Commissioner Cecilia Malmstrom said: "We regret the choice of the US to move ahead with tariffs."

Noting that the EU and the US have both been found in breach of WTO rules, Malmstrom said "this step leaves us no alternative but to follow through in due course with our own tariffs in the Boeing case, where the US has been found in breach of WTO rules."

The US and the EU have been battling for 15 years over aircraft subsidies. Each side accused the other of failing to comply with the World Trade Organization's rulings and refusing to negotiate any settlement.

After WTO ruling on aircraft subsidies last year, the US levied additional tariffs on a wide range of EU goods, which took effect on Oct 18.

In the newly released statement, USTR Robert Lighthizer said he had decided to revise the action based on a review of the Section 301 action and following public comments.

Aside from hiking the tariffs for certain large civil aircraft, he is also modifying the list of other products of "certain current and former EU member states" subject to additional 25 percent duties, effective March 5.

According to an earlier statement from the Office of the 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.

Xinhua - AFP