The World Trade Organization said Tuesday it will allow the European Union to impose tariffs on up to $4 billion worth of U.S. goods—it’s the latest development in a longstanding dispute between the two economic superpowers over aircraft subsidies.
- A preliminary list of American goods the E.U. can now tax includes frozen fish, citrus fruit, vegetables, tobacco, leather goods, wine, and airplanes.
- The E.U. will not be able to set any new tariffs in place immediately, the New York Times reports—it must first request authorization from the WTO.
- The U.S. last year imposed its own tariffs on a spate of European products including cheese, wine, and olive oil after the WTO gave it permission to tax up to $7.5 billion in exports from the E.U. every year.
WHAT TO WATCH FOR
It’s still possible that the E.U. will reach a settlement with the U.S. that will preclude it from levying the new tariffs.
The WTO’s decision stems from a 16-year trade dispute between the United States and Europe over subsidies the E.U. gave to French aircraft giant Airbus, which the U.S. said unfairly benefited that company. The E.U. then filed its own complaint over subsidies to the U.S. aircraft manufacturer Boeing. The WTO’s rulings on tariffs are intended to help each economy claw back the profits they lost because of the other’s trade policy.