A new list of US tariffs – given the go-ahead by the World Trade Organisation (WTO) last week – comprises a 10% levy on large civil aircraft made in EU countries including the UK, France, Spain and Germany.
The WTO ruled that president Trump was clear to enforce the renewed tariffs, which were strongly disputed by European manufacturer Airbus and could result in an EU retaliation against US exports, including Boeing aircraft and parts.
Trump’s new tariff list does however exclude a number of Airbus parts and sections of fuselage which are needed for an Alabama-based buyer of A320s. Officials in Alabama lobbied for the parts used at the plant in Mobile to be spared from the list.
Last week, Airbus’ CEO has warned of ‘insecurity, disruption and serious damage' to the aerospace industry in the wake of WTO’s ruling, which clears the way for tariffs on as much as $7.5 billion worth of European exports.
As well as aircraft parts, the US has placed 25% hikes on items including alcohol, olives, cheese, butter and yogurt from a number of European nations.
In a statement, Airbus warned of a ‘severe impact’ on US and EU industries and higher costs on the acquisition of new aircraft for both US and EU airlines.
In the coming months, the WTO will determine the amount of tariff countermeasures the EU can impose on US products – including imported Boeing aircraft – in Airbus’ parallel counter case regarding alleged illegal subsidies to Boeing.
Currently, 40% of Airbus’ aircraft-related procurement comes from US aerospace suppliers.