The United States will soon impose tariffs on European goods. The US believes subsidies paid by certain EU member states to French aircraft maker Airbus harmed the US industry. In the dispute, which began in 2004, the United States argued that the EU gave Airbus billions of dollars of launch aid that resulted in an unfair advantage for Airbus. Specifically, the United States asserted that the aid allowed Airbus to gain market share in Europe, Australia, China, South Korea, and elsewhere.
The bulk of the tariffs will be applied to imports from France, Germany, Spain, and the United Kingdom—the four countries said to be responsible for the subsidies. The range will cover civil aircraft, agricultural and other products, sweaters, pullovers and sweatshirts in wool, cashmere, cotton and manmade fibers, performance outerwear, wool suits, women’s and girls’ cotton nightwear, swimwear, and cotton bed linen and blankets.
The WTO is expected to authorize the countermeasures. The tariffs won’t yet provoke a trade war because the EU is not allowed to retaliate against WTO-authorized countermeasures. Meanwhile there have been rumblings that the US might be targeting Vietnam. The Southeast Asian country has seen some benefit from the US-China trade war as apparel firms look elsewhere–with Cambodia and Bangladesh in the running, too–for sourcing and manufacturing production.