That hap­pened quick­ly: Less than a day after the announce­ment, tar­iffs are now in place on a whole range of US prod­ucts. The trig­ger is unau­tho­rized US sub­si­dies for air­craft man­u­fac­tur­er Boe­ing. As of Tues­day, the Euro­pean Union is demand­ing new puni­tive tar­iffs on imports of numer­ous goods from the USA. The spe­cial charges approved by the World Trade Orga­ni­za­tion (WTO) for ille­gal sub­si­dies for the US air­craft man­u­fac­tur­er Boe­ing are due on food and bev­er­ages such as toma­to ketchup, nuts, rum and vod­ka. The affect­ed prod­ucts also include video game con­soles, trac­tors, shov­el load­ers and air­planes. The puni­tive tar­iff on air­craft is 15 per­cent, and that on all oth­er prod­ucts is 25 per­cent. The EU announced the addi­tion­al levies on Mon­day. The back­ground to this is that the World Trade Orga­ni­za­tion (WTO) arbi­tra­tor decid­ed in mid-Octo­ber that the EU may impose puni­tive tar­iffs on US imports amount­ing to almost four bil­lion dol­lars (3.4 bil­lion euros) a year because of ille­gal sub­si­dies for Boeing.

In a sim­i­lar case, arbi­tra­tors had approved the USA for ille­gal sub­si­dies for the Euro­pean air­craft man­u­fac­tur­er Air­bus puni­tive tar­iffs on prod­ucts from the EU amount­ing to 7.5 bil­lion dol­lars. The USA then intro­duced spe­cial tax­es on prod­ucts from the EU. In addi­tion to air­planes, wine from Ger­many and France, Parme­san from Italy and olive oil from Spain are also affect­ed. The EU hopes that future US Pres­i­dent Joe Biden will now agree to seri­ous talks about a set­tle­ment of the dis­pute over sub­si­dies for the avi­a­tion indus­try that has been going on for years. Under US Pres­i­dent Don­ald Trump, there was no rap­proche­ment until recently.

Trump had also intro­duced spe­cial US tar­iffs on steel and alu­minum imports, to which the EU respond­ed with retal­ia­to­ry tar­iffs on US prod­ucts such as jeans, bour­bon whiskey, motor­cy­cles and peanut but­ter. The trade dis­pute is annoy­ing for con­sumers, as spe­cial tar­iffs can lead to price increas­es for the prod­ucts concerned.

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