European Union appeared all prepared to take stern action against US tariff threats and decided to revert in the same tone. On Tuesday, EU Trade Commissioner Cecilia Malmstrom notified US authorizes that EU would impose additional tariff on US goods worth 35 billion euros if Washington goes ahead with its recent proposal of levying extra tariff on EU goods.
EU’s warning was a retaliatory move against US Trade Representative office proposal to hike duty on a list of goods worth $4 billion imported from Europe, announced earlier this month. EU-US trade war stems from long-running dispute between the two over the aircraft subsides given to the world’s biggest airplane manufacturers, Boeing (BA) and Airbus (EADSF).
The conflict between EU and US dates back to 2004, when EU authorities claimed that US aircraft manufacturer, Boeing, received $19 billion in unfair subsidies from federal and state governments between 1989 and 2006. The US government filed a similar claim against European aircraft manufacturer, Airbus, over European subsidies given to it. The case is to be decided by World Trade Organisation, which is expected to deliver its findings by the end of this summer.
Malmstrom told newly elected members of European Parliament in Brussels, “We will not accept any managed trade, quotas or voluntary export restraints and, if there were to be tariffs, we would have a rebalancing list.” She added, “It is already basically prepared worth 35 billion euros ($39 billion). I hope we don’t have to use that one.”
Her stern and stark statement reflected that EU would by now means bow down to US terms.
She called US President Donald Trump’s justification of adding additional duties on EU cars in the name of ‘threat to national security’, simply ‘absurd’.
Malmstrom issued the statement as the EU-US trade talks had been on a standstill, for almost a year since European Commission chief Jean-Claude Juncker and Trump cancelled out the trade truce.
She said, “The United States are not ready to start them if agriculture is not included which is a red line for us…So for the moment nothing happens here.”