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US sets tariffs on EU aircraft, agricultural goods after trade group ruling

The United States will be issuing tariffs on aircraft, agricultural and industrial goods imported from the European Union following a World Trade Organization, or WTO, ruling authorizing the U.S. to issue tariffs on roughly $7.5 billion worth of European goods in response to subsidies awarded to aircraft maker Airbus SE.

A 10% tariff will be applied to aircraft and 25% tariffs will be applied on agricultural and industrial products from the EU, a senior official from the Office of the U.S. Trade Representative said in a briefing Oct. 2 following the WTO decision. The tariffs are set to go into effect Oct. 18.

A list provided by the USTR indicates consumer products ranging from olives and wine to sweaters and suits will be subject to 25% tariffs, with those products coming from a number of different EU countries. Irish and Scottish whiskies are specifically subject to those tariffs, while coffee imported from Germany has been specifically designated for the tariffs as well.

U.S. Trade Representative Robert Lighthizer said in a statement that the Airbus subsidies have harmed U.S. companies and workers.

"For years, Europe has been providing massive subsidies to Airbus that have seriously injured the U.S. aerospace industry and our workers. 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," Lighthizer said in a statement. "We expect to enter into negotiations with the European Union aimed at resolving this issue in a way that will benefit American workers."

The ruling settles a 15-year dispute and is the largest arbitration award issued by the organization, The Wall Street Journal reported. After the U.S. filed its complaint, the EU filed a complaint with the WTO against Boeing. A decision in that case is still pending, and it could result in the EU imposing tariffs on various U.S. products.

When asked if the tariffs would only target the Airbus consortium, meaning the United Kingdom, Germany, France and Spain, the USTR official said the support provided to Airbus constituted an "EU-wide failure."

"It was an EU-wide failure to end those subsidies and the harm that they've caused the United States," the official said. "The EU collectively bears responsibility for the dispute reaching this point. We certainly hope the EU will abandon the massive corporate welfare to Airbus and allow it to compete on a level playing field."

Airbus, according to the Wall Street Journal, sources about 40% of its parts from the U.S. and has a manufacturing facility in Mobile, Ala. It also has orders from a number of U.S. airlines, including Delta Air Lines Inc. and JetBlue Airways Corp.

U.S. aircraft manufacturer Boeing said in a statement following the decision that Airbus "has refused for years to comply with WTO rulings," adding that Airbus still has the ability to avoid tariffs by fully complying with its obligations, according to the Associated Press.

German Chancellor Angela Merkel told reporters the WTO decision would create a burden for Airbus, describing the decision as "a verdict according to international law that now weighs on Airbus, one must sadly say," the wire service reported.