The U.S. says it will implement a 10% tariff on EU aircraft and a 25% tax on "agricultural and other products" starting Oct. 18, following a World Trade Organization's ruling allowing the U.S. to impose up to $7.5 billion in tariffs on European products each year.
The big picture: The United States Trade Representative (USTR) and the EU have each drafted lists of at least $20 billion worth of each other's products to tax in response to this WTO decision. Meanwhile, tariffs from the U.S. trade war with China are estimated to cost U.S. households $2,000 each by next year, per the National Foundation for American Policy.
- The U.S. tariffs are in response to European subsidies for Boeing rival Airbus, the New York Times reports.
Where it stands: The USTR released a list on Wednesday of which European products — including new airplanes, coffee, olive oil, fruit and cheese — will be hit with tariffs. The WTO is currently weighing a case brought by the EU against the U.S. for subsidizing Boeing, NYT reports.
- U.S. tariffs on Airbus aircraft will likely raise the price tag on future plane purchases for American airlines.
- The U.S. can block the billions in trade from Europe until the 2 sides have negotiated a settlement or the WTO decides Europe has complied with its guidelines. The two sides are expected to meet for trade talks Oct. 14.
Background: This week's ruling — the final move in a nearly 15-year conflict over Airbus and the "largest authorized retaliation in the [WTO's] history," per the Times — spells out the value of what damages the U.S. can try to regain through tariffs, after the WTO ruled last year "that Europe had illegally subsidized several of Airbus’s models."
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