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Europe hit with huge tariffs if US wins WTO dispute on Monday

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The World
Trade Organization (WTO) is set to back a U.S. request to impose tariffs on
billions of dollars of European goods, potentially sparking a new trade war
across the Atlantic, several media reports suggest.

Arbitrators
from the WTO are meeting at 10.am. local time in Geneva on Monday to finalize a
15-year-old case brought by the United States. The U.S. seeks compensation for
what they say are illegal subsidies granted to the plane maker Airbus by
European governments.

Earlier this
month, Airbus shares dipped sharply following reports that the WTO will rule in
favour of the U.S, granting President Donald Trump the right to slap billions
of dollars of tariffs in compensation.

Washington
has said it wants to impose tariffs of up to 100% on European exports to the
U.S. with an annual trade value of around $11.2 billion a year.

Reuters,
quoting sources, reported Thursday that the United States government won’t get
to that figure but will win the right to impose tariffs on EU goods worth
around $7.5 billion annually.

The United
States has already drawn up a wide-ranging list of European goods
which it says it will select from, once the WTO determines an appropriate
amount.

Aside from
European-built aircraft and parts, goods on the list included motorcycles,
food, drink, clothes, base metal parts and equipment to make jewelry.

Europe seeks
Boeing revenge

The EU has
its own separate case before the WTO, in which it argues that the U.S. plane
maker Boeing receives unfair financial assistance from the U.S.
federal government. That ruling from arbitrators in Switzerland is estimated to
be about nine months away.

Airbus’s
Chief Commercial Officer (CCO), Christian Scherer, told CNBC last week that the
legal action was unlikely to benefit either firm.

“I don’t
think that the aerospace communities or ecosystems on either side of the
Atlantic have anything to gain (by) going at each other’s jugular,” he said at
the launch of the firm’s annual commercial outlook.

In April
this year, the European Commission launched a public consultation on its
preliminary list of products from the United States that it would seek to hit
with import tariffs.

The list, representing about $20 billion worth of U.S. exports to the EU, also covered a wide range of items including aircraft, chemicals and food products such as frozen fish and citrus fruit.

source: cnbc.com

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