US may target Scotch whisky in new EU tariffs threat

The United States has escalated a threatened trade fight with the EU over aircraft subsidies, by extending the list of products it could impose tariffs on.

The US Trade Representative’s (USTR) office said Scotch whisky, olives, Italian cheese and a variety of metals were being added – meaning a total of $25bn (£19.8bn) worth of EU goods were now at risk of being targeted in the dispute.

It centres on a row which has been bubbling for 15 years at the World Trade Organisation (WTO).

Airbus A380
Image: Airbus and Boeing dominate the commercial airline markets

The trade body has previously ruled that the world’s two largest planemakers – Boeing of the US and Europe’s Airbus – have both received billions of dollars of harmful subsidies.

The US and the EU have threatened to impose tit-for-tat tariffs on planes, tractors and food and there had been some hope of a resolution in sight at the Paris Air Show last month.

US sources told the Reuters news agency then that Washington could be open to negotiations on an “enforceable mechanism” that could allow Airbus to receive government funding on commercial terms.

Such a deal would also include moves by the US to address tax incentives provided to Boeing.

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The row is separate to President Donald Trump’s protectionist trade agenda that has seen him fight to address US trade deficits with the rest of the world – including China and the EU.

There is renewed hope of a resolution after he and his Chinese counterpart Xi Jinping agreed to restart negotiations aimed at ending the row between the world’s two largest economies.

U.S. President Donald Trump and China's President Xi Jinping shake hands ahead of their bilateral meeting during the G20 leaders summit in Osaka, Japan, June 29, 2019.
Image: Mr Trump has used his presidency to target perceived injustices in US trading relationships

Boeing, Airbus and the EU were yet to comment on the latest US threat in the aircraft subsidy dispute.

According to the Scotch Whisky Association, exports to the US were worth £1bn in 2018.

Commenting on the escalation, Distilled Spirits Council of the United States spokeswoman Lisa Hawkins said: “We strongly oppose the inclusion of distilled products in the proposed retaliation list.

“US companies – from farmers to suppliers to retailers – are already being negatively impacted by the imposition of retaliatory tariffs by key trading partners on certain US distilled spirits… and these additional tariffs will only inflict further harm.”

Source: SKY NEWS

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