U.S.-EU Trade War Escalates as Trump Increases Tariff on European-built Airbus Jets to 15%

U.S. authorities have announced that the Trump administration will be increasing the 10% tariff on imported Airbus jets imposed in October last year to 15%, commencing March 18. The increase has been approved by the World Trade Organization (WTO) as a punitive and retaliatory measure imposed by the USA on Airbus as a consequence of EU subsidies given to Airbus.

The move comes at a curious time and is seen as quite dangerous for US-EU relations as the WTO is also about to give permission to the EU to impose tariffs on Boeing aircraft, including the 737 Max, 787 and 777 aircraft in May or June as Airbus had lodged a complaint with the WTO alleging US$12 billion per annum damages as a consequence of subsidies provided by the U.S. to Boeing for the development of passenger jets.

In a statement issued by Airbus in response to the second tariff increase, the European planemaker said that:  “Airbus deeply regrets USTR’s [Unites States Trades Represenatives] decision to increase tariffs on aircraft imported from the EU as well as the decision to maintain tariffs on goods from other sectors,” and that it “ignores the many submissions made by US airlines, highlighting the fact that they – and the US flying public – will ultimately have to pay these tariffs.”

Airbus is hopeful that once the EU tariffs become applicable, the USTR will change its position on the tariffs that have been levied on European-manufactured Airbus jets.

It is understood the levies do not affect A320s that roll off the final assembly line at the Mobile, Alabama plant, or the A220 being manufactured at the Mirabel, Quebec site in Canada.