Brussels, April 17 (IANS) The European Union on Wednesday released a list of US products worth $20 billion to be targeted as countermeasures due to a long-running dispute over aircraft subsidies.
The US goods that could be targeted over subsidies given to Boeing, included cheese, ketchup and fish, CNN reported.
The move followed a similar step taken by the Donald Trump administration, which threatened last week to impose tariffs on EU imports worth $11 billion over subsidies for regional planemaker Airbus.
The EU, however, indicated on Wednesday it wanted to avoid further escalation. “While we need to be ready with countermeasures in case there is no other way out, I still believe dialogue is what should prevail,” Europe’s top trade official Cecilia Malmstrom said in a statement.
A spokesperson for the European Commission said while products on the broad target list represented US exports worth $20 billion, any retaliatory action would hit a smaller sub-section of goods.
While the tariffs carry political weight, they would have limited economic impact if imposed.
Holger Schmieding, the chief economist at Berenberg bank, said the measures threatened by the US and the EU would “not hurt the (global) economic outlook much”.
The fight over aircraft subsidies has been running for 15 years. The EU estimated in 2012 that the damage from Boeing subsidies was roughly $12 billion.
EU authorities in 2004 said Boeing received $19 billion in unfair subsidies from federal and state governments between 1989 and 2006. The US government filed a similar claim that year over subsidies to Airbus.
The World Trade Organisation had handed down favourable rulings to both sides, underscoring the complexity of the dispute.
Officials on both sides say the fight over aircraft subsidies was not related to other trade disputes. But the threats came at a particularly sensitive time for transatlantic trade.
The EU on Monday agreed to restart trade talks with the US, despite strong objections from French President Emmanuel Macron. But it said agriculture won’t be up for discussion, while the US insisted it must be part of discourse.
The trading relationship between the two sides is worth over $1 trillion, but Europe exports significantly more goods to the US than it imports. That has been a sticking point for Trump who is still considering whether to impose up to 25 per cent tariffs on European vehicle imports.
Washington has imposed tariffs on European steel and aluminium exports. The EU retaliated with tariffs on more than $3 billion worth of American products in June. The levies hit products, like motorcycles, orange juice, bourbon, peanut butter, cigarettes and denim.