France & EU ready to respond with sanctions in trade rift with US over Airbus

French Finance Minister Bruno Le Maire said on Thursday that the European Union is ready to respond “with sanctions” should Washington reject Brussels’ offer in settling the Airbus trade dispute.

“If the American administration rejects the hand that has been held out by France and the European Union, we are preparing ourselves to react with sanctions,” said Le Maire as cited by Reuters.

The warning follows the Trump administration slapping the EU with hefty 25 percent tariffs on a range of industrial and agricultural products. The duties are set to take effect on October 18.

The new duties will apply to Scotch whisky, French wine, and cheese from Italy, among other goods from Germany, the UK, and Spain. Certain products, including Italian wine, are exempt. The tariffs will also target sweaters, wool, cashmere, and other clothing items, as well as olives. In addition, 10 percent duties will be imposed on “large civil aircraft.”

Washington decided to proceed with the sanctions after the WTO ruled in favor of the US in the long-running case between Boeing and Airbus.

The two major aircraft makers’ trade dispute started in 2004 when Washington accused the UK, France, Germany, and Spain of providing illegal subsidies and grants to Airbus. A year later, in similar complaints, the EU said that Boeing had received $19.1 billion in prohibited subsidies from the US government between 1989 and 2006.The EU complaint is also being investigated by the WTO, with a ruling expected in about eight months.

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