European Union makes appeal to USA: let's avoid another tariff war

European Commissioner designate for Trade Phil Hogan answers questions during his hearing at the European Parliament in Brussels Monday Sept. 30 2019

The tariffs can take effect no earlier than mid-October because a key WTO panel needs to formally sign off on them first.

The WTO gave the approval after judging that European aerospace firm Airbus. had been provided with illegal government subsidies.

Washington has requested the WTO meet October 14 to formally authorize the tariffs, and the duties would then take effect October 18, according to the U.S. Trade Representative's Office. Other items subject to new import duties are fresh cheese, virgin olive oil, wine and pork cuts, which particularly affect Spain.

European Commission spokesman Daniel Rosario said Thursday that "this is a move that will first and foremost hit USA consumers and companies and will make efforts towards a negotiated settlement more complicated".

"As a totally unrelated sector, it is unacceptable for the spirits producers having to pay the price for a dispute that is essentially about civil aircraft subsidies", he said in a statement released on Thursday.

Stock markets around the world, which were already down on concerns for the world economy, added to their losses on the news.

More news: Australia stocks climb after central bank cuts interest rates

The EU will retaliate against against any Airbus-linked tariffs when the WTO rules early next year on the bloc's dispute over US subsidies to Boeing, according to European Trade Commissioner Cecilia Malmstrom. We are working closely with the US, EU and European partners to support a negotiated settlement to the Airbus and Boeing disputes.

A range of goods from the European Union are to be hit with new U.S. tariffs including Irish butter, cheese, liqueurs and pork products.

"This means it's not some sort of arbitrary question but a verdict according to worldwide law that now weighs on Airbus, one must sadly say", she told reporters in Berlin.

"Finally, after 15 years of litigation, the WTO has confirmed that the United States is entitled to impose countermeasures in response to the EU's illegal subsidies", USA trade representative Robert Lighthizer said in a statement. On Tuesday, a private index of USA manufacturing output dropped to the lowest level since the recession year 2009. "We are still ready and willing to find a fair settlement, but if the USA decides to impose authorized countermeasures, the European Union will do the same", she told reporters. It is uncertain whether tariffs on Airbus aircraft would affect firm orders already placed by USA carriers and leasing companies or would be levied only on orders not yet firmed up.

But the specter of more tariffs comes at a sensitive time.

The Trump administration believes tariffs were effective in bringing China to the negotiating table over trade and in convincing Japan to open its agricultural market to USA products. -China trade war is taking an increasing toll on the USA economy.

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