Cognac targeted with tariffs in US-EU trade row

The US will impose new import taxes on some French and German goods as part of a long-running trade dispute.

It announced tariffs on aircraft manufacturing parts along with certain non-sparkling wine, cognac and other grape brandies.

These will be added to the list of products taxed since 2019, the US Trade Representative said in a statement.

The EU and US have fallen out over subsidies for aircraft manufacturers Airbus and Boeing.

The tariffs are a result of a 16-year feud over state support provided to US-based plane-maker Boeing and European rival Airbus.

The latest retaliation sees new tariffs imposed by the US on “aircraft manufacturing parts from France and Germany, certain non-sparkling wine from France and Germany, and certain cognac and other grape brandies from France and Germany”.

In 2019, the World Trade Organisation (WTO) said the US was justified to retaliate against the EU on $7.5bn (£5.4bn) worth of goods for support granted to Airbus, prompting the US to place tariffs on items such as certain whiskeys, wines and cheese.

The EU was authorised this year by the WTO to levy additional customs duties on $4bn worth of American products.

On Wednesday, the US said it was taking the additional action because it said when the EU imposed tariffs on American goods it used trade data when volumes had been “drastically reduced due to the horrific effects” on the global economy by the coronavirus.

As a result, the US said: “Europe imposed tariffs on substantially more products than would have been covered if it had utilised a normal period.”

It said: “Although the United States explained to the EU the distortive effect of its selected time period, the EU refused to change its approach.”

The World Trade Organisation authorised by the EU’s measures.

In recent months, both sides have taken steps they say correct the offending plane-making subsidies but little progress has been made towards a settlement.

Tensions between the two trading blocs escalated further this week after the EU and China signed a long-awaited investment treaty that aims to open up lucrative new corporate opportunities.

The US and China have been locked in their own trade war since 2018 which has intensified under Donald Trump’s presidency.

Joe Biden will be sworn in as the new US president on 20 January.

– BBC

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