On November 9, 2020, the EU, pursuant to World Trade Organization (WTO) authorization, applied approximately $4 billion worth of retaliatory tariffs on U.S. goods in the latest chapter of the long-running dispute between the EU and the United States over government subsidies provided to both Boeing and Airbus. This retaliation follows an October 2020 WTO arbitrator ruling allowing the EU to take such countermeasures. See Update of October 15, 2020. The EU’s implementing regulation for the tariffs states: “At present, the amount is considered appropriate to effectively induce compliance and provide relief to EU economic operators because, in the current economic climate, it permits measures to be imposed on U.S. large civil aircraft and other products that are considered sufficiently similar to the countermeasures imposed by the United States.”

According to a European Commission press release, the tariffs “bring the EU equal footing with the U.S., with sizeable tariffs on each side based on two WTO decisions related to aircraft subsidies.” Valdis Dombrovskis, EU Commissioner for Trade, said, “We have made clear all along that we want to settle this long-running issue. Regrettably, due to lack of progress with the U.S., we had no other choice but to impose these countermeasures.” The countermeasures include additional 15% tariffs on U.S. aircraft and 25% tariffs on a range of U.S. agricultural and industrial products, including fresh and frozen fish, fresh and dried fruits and vegetables, cocoa powder and chocolate, nuts and seeds, cotton, orange juice and grapefruit juice, spirits and alcohol, certain polymers, suitcases and handbags, shovel loaders and tractors, and exercise equipment.

The United States has already imposed its own tariffs on approximately $7 billion worth of EU products authorized by the WTO in a related dispute. See Updates of August 13, 2020, February 17, 2020, and October 4, 2020. In response to the EU’s action, Ambassador Robert Lighthizer stated: “The United States is disappointed by the action taken by the EU today. The alleged subsidy [a Washington State tax provision] to Boeing was repealed seven months ago. The EU has long proclaimed its commitment to following WTO rules, but today’s announcement shows they do so only when convenient to them.”