By Laurence Norman and Daniel Michaels 

BRUSSELS -- The European Union will impose tariffs on $3.99 billion of Boeing Co. jets and other U.S. goods annually as part of a long-running trade dispute, the bloc's trade chief said Monday.

The EU had delayed imposing the tariffs since the World Trade Organization ruled in the bloc's favor on Oct. 13, preferring not to proceed with tariffs before the U.S. election. Some officials had also suggested waiting until a new U.S. administration was in place in January.

EU trade officials instead decided to make the move -- which is likely to be seen as hostile in the U. S. -- while Mr. Trump is still president.

The tariffs will come into effect on Tuesday, EU officials said. They include a 15% duty on imports of all Boeing models, which will account for about 44% of the $4 billion in levies, an EU official said. Other goods, including some agricultural products, processed agricultural products and industrial items, will be hit with a 25% tariff.

The EU action comes after the U.S. imposed tariffs following a WTO decision in October 2019 authorizing tariffs on $7.5 billion in Airbus SE jets and other imported European products, the largest arbitration award in WTO history.

EU Trade Commissioner Valdis Dombrovskis said that, given the U.S. decision last year to quickly impose tariffs and the fact the new administration doesn't take office until January, the EU decided it shouldn't wait longer to impose the tariffs.

"I think we have been very clear on all occasions that our preference is for a negotiated settlement. So as soon as the U.S. is willing to drop their tariffs, we are willing to drop our tariff," Mr. Dombrovskis said in an interview.

The jetliner dispute was one of several trade clashes that have strained trans-Atlantic ties under the Trump administration, although the jetliner dispute stretches back nearly two decades.

Mr. Dombrovskis said EU officials had been in contact with the team of President-elect Joe Biden, including on trade issues but didn't say whether they had discussed the Boeing tariffs.

On Monday evening, the EU said the U.S. products to be targeted with a 25% tariff would include tobacco, nuts and seeds, spirits, sauces, soups and syrups, self-propelled shovel loaders, tractors and proteins.

The jetliner dispute is the longest since the WTO's inception. In 2004, the U.S. took European countries to the WTO over subsidies to Airbus, and Europe responded soon after with a case against U.S. support for Boeing.

WTO rulings since then have found that both sides provided prohibited subsidies, but Europe did so to a greater extent. The WTO's October pronouncement ended years of suits and countersuits and left the two sides with the choice of negotiating a solution or fighting a protracted trade battle.

An Airbus spokesman said the company welcomed the EU move.

Mr. Dombrovsksis said he is hopeful that a settlement can still be negotiated with the outgoing Trump administration's trade teams. The EU has been in talks with U.S. Trade Representative Robert Ligthizer in recent days. His office, which leads the U.S. response to the case, didn't immediately respond to a request for comment.

Mr. Lighthizer, the top U.S. trade negotiator, said recently the EU has "no lawful basis to impose tariffs" because the subsidies for Boeing have already been repealed. He suggested the U.S. would consider retaliating if Brussels moved forward with tariffs.

"Any imposition of tariffs based on a measure that has been eliminated is plainly contrary to WTO principles and will force a U.S. response," he said.

European officials say they can levy an additional $4 billion in tariffs based on a previous finding of other U.S. violations, which would be on top of the $3.99 billion awarded last month. EU trade ministers met Monday to discuss the decision to move ahead with the tariffs.

Mr. Dombrovskis struck a cautious note on the prospect of relaunching broad bilateral trade talks with the incoming administration. He said his immediate goal will be to work with the U.S. on WTO reform and to aim for targeted bilateral deals, including resolving trade disputes between the two sides and striking trade facilitation agreements.

Write to Laurence Norman at laurence.norman@wsj.com and Daniel Michaels at daniel.michaels@wsj.com

 

(END) Dow Jones Newswires

November 09, 2020 12:49 ET (17:49 GMT)

Copyright (c) 2020 Dow Jones & Company, Inc.
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