The US said it would prevent tax increases on the $ 7.5 billion (£ 5.75 billion) of European and UK goods it imposed as a penalty to subsidize homes. aircraft manufacturer Airbus.
The move comes as the two sides are struggling to end a 16-year trade war on state aid for Airbus and US rival Boeing.
Last year, the US raised border taxes on more than 100 items, including jumpers, single malt whiskey and cheese.
It says the EU has not done enough.
“The EU and its member states have not taken the necessary actions to comply with WTO decisions,” top US trade official, Robert Lighthizer, said on Wednesday. “However, the United States is committed to achieving a permanent resolution of this dispute.
The European Union cautiously welcomed the US decision not to increase the amount of taxable goods.
“The Commission acknowledges the US decision does not exacerbate the ongoing aircraft dispute by increasing tariffs on European products,” an EU spokesman said.
Last month, Airbus said it would change some of its dispute responsibility agreements, saying the changes, including raising interest rates on loans with France and Spain, eliminate “any any justification “for US border taxes.
The move prompted EU officials to call for an end to “unreasonable” tariffs. Many US businesses have also objected to the imposition of taxes, causing US buyers to increase prices.
On Wednesday, Airbus spokesman Clay McConnell said in a statement that the company “truly regrets that, despite recent European actions to achieve full compliance, USTR [US Trade Representative] has decided to maintain tariffs on Airbus aircraft – especially at a time when aviation and other sectors are experiencing an unprecedented crisis “.
When do tariffs start?
The US announced tariffs on $ 7.5 billion worth of goods last year after the World Trade Organization ruled that state aid was provided to Airbus for the deployment of the A380 and A350 jets. The firm is illegal and authorized by the United States to retaliate.
In February, the US raised the tariff on airplanes from 10% to 15%, keeping the 25% tariff on other items.
This summer, US officials again threatened to raise tariffs or force new items to be subject to import duties.
The items facing new tariffs include salmon fillets, gin and olives.
By law, the United States must periodically review its tariffs. On Wednesday, they announced minor tweaks to the list, such as removing sweet biscuits like short bread made in the UK and adding jam from France and Germany.
Commercial attorney Jamieson Greer, former chief of staff for US Trade Representative Robert Lighthizer, told the BBC: “The reality is that this could be resolved if Airbus takes some action to provide compensation. “
Adding tariffs in the immediate future?
The European Union (EU), which has launched the challenge of US subsidies to Boeing, has threatened to hit the US with its own tariffs. It is waiting for the World Trade Organization to decide how big of such a punishment could be.
The US said in May that it had eliminated disputed interests. That WTO ruling is expected later this year.
“In the absence of a settlement, the EU will be willing to take full advantage of its own sanctions rights,” Trade Commissioner Phil Hogan said last month.
This issue also complicates trade negotiations between the US and the UK.
UK Trade Minister Liz Truss raised the issue in talks with Mr. Lighthizer this month, when the two sides held a third round of talks.
Ms. Truss said while she applauded the US decision not to raise tariffs: “The notice does not mention already existing tariffs on items such as malt Scotch whiskey.”
“These tariffs hurt industry and livelihoods on both sides of the Atlantic and no one. So I’m pushing for talks with the US to get rid of them,” she said. as soon as possible.”