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EU to retaliate as US tariffs over aircraft subsidy dispute kick in

The European Union would retaliate in time to the tariffs imposed by the U.S. on $7.5 billion worth of EU goods in connection with the bloc's illegal state subsidies for Airbus SE, EU Trade Commissioner Cecilia Malmström said.

After securing a favorable ruling on the subsidy dispute from the World Trade Organization earlier this month, the U.S. on Oct. 18 applied a 10% tariff on large civil aircraft imported from the EU, and a 25% duty on European agricultural and consumer products, including wine and cheese.

Malmström said the EU will hit U.S. goods with retaliatory tariffs in relation to a similar WTO case accusing the U.S. of providing illegal subsidies to Boeing Co.

"We regret the choice of the U.S. to move ahead with tariffs," Malmström said in a statement. "This step leaves us no alternative but to follow through in due course with our own tariffs in the Boeing case, where the U.S. has been found in breach of WTO rules."

Malmström repeated her call for negotiations with the U.S. to settle the trade dispute, saying the bloc's "concrete proposals" regarding existing aircraft subsidies remain on the table.

In April, the European Commission unveiled a list of U.S. products that could be hit with tariffs due to the Boeing case. The targeted goods, which represent about $20 billion worth of annual U.S. exports to the EU, include new non-military aircraft, fruits, coffee, cheese and tobacco.