US-EU trade relations

US to maintain 25% tariffs on Spanish cheese, wine and other products

Washington will continue imposing duties on European Union exports despite calls from a bipartisan group of 13 US senators to suspend the measures

A worker collects olives in Seville.
A worker collects olives in Seville.PACO PUENTES

The United States government announced on Wednesday that it will maintain tariffs imposed on exports from the European Union last year – a decision that will affect Spanish cheese, wine, olive oil and pork products.

The US introduced the duties on October 18, 2019, after winning a dispute at the World Trade Organization (WTO) over illegal subsidies given to aircraft maker Airbus more than 15 years ago.

The EU and member states have not taken the actions necessary to come into compliance with WTO decisions
US trade representative Rovert Lighthizer

In 2004, the US argued that the French, Spanish, British and German governments had handed out loans to Airbus at interest rates well below market standards. The WTO ruled in favor of the US and decided that, as compensation for the damage caused to the US aviation industry, Washington could impose as much as $7.5 billion (€6.34 billion) worth of European exports. The decision principally affected products from Germany, the United Kingdom, France and Spain.

The US Department of Trade said on Wednesday that some changes will be made to the list of products subject to the tariffs: a selection of items from Greece and the United Kingdom will be removed, and replaced by products from France and Germany. But there will be no change to the list of Spanish goods.

The decision means that a number of Spanish exports, including preserves, cured sausages and cheeses, will continue to be subject to a 25% tariff. The 10% duty on civil aircraft will also be maintained.

“The EU and member states have not taken the actions necessary to come into compliance with WTO decisions,” said US trade representative Rovert Lighthizer, who added that the US was willing to continue to negotiate ways to resolve the Airbus dispute.

The EU may also be able to retaliate against the US offense if the WTO approves duties on US aircraft maker Boeing for unfair trade practices

“The United States will begin a new process with the EU in an effort to reach an agreement that will remedy the conduct that harmed the US aviation industry and workers and will ensure a level playing field for US companies,” said Lighthizer in a press release. According to news agency Bloomberg, the US government has so far rejected four proposals from the EU on the issue.

In a bid to reverse the US tariffs, Airbus announced in July that it would increase loan repayments to France and Spain. The EU may also be able to retaliate against the US offense if the WTO approves duties on US aircraft maker Boeing for unfair trade practices.

On Monday, a bipartisan group of 13 US senators sent a letter to the US Trade Representatives Office to call for an end to the tariffs on EU exports. The letter, seen by Reuters, said that US “restaurants, retailers, grocers, importers and distributors” were experiencing “severe economic hardship due to the increased cost of goods.”

The US Distilled Spirits Council last month also demanded an end to the duties, saying drinks firms on both sides of the Atlantic “have suffered enough.”

English version by Melissa Kitson.

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