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U.S. tariffs proposed in EU trade battle could drive up costs of fish, cheese and other goods

Kudlow on trade negotiations with the EU and NAFTA

A simmering transatlantic trade row risked escalating on Tuesday after the U.S. threatened to impose tariff counter-measures of up to $11.2 billion on a host of European products. The threatened U.S. tariffs are in response to subsidies received by aircraft maker Airbus and target a host of European products including helicopters, aircraft parts and cheese.

The threat from Washington came amid a fragile truce between the EU and the U.S. after President Donald Trump angered Europe last year by slapping duties on steel and aluminum imports and threatening new ones on cars.

For more than 14 years, Washington and Brussels have accused each other of unfairly subsidising Boeing and Airbus, respectively, in a tit-for-tat dispute that long predates Mr. Trump's tenure in the White House. The Boeing-Airbus spat is the longest and most complicated dispute dealt with by the WTO, which aims to create a level playing field in global trade.

In a statement Monday, the office of the U.S. Trade Representative (USTR) said the World Trade Organization (WTO) had repeatedly found that European subsidies to Airbus have caused adverse effects to the United States.

"This case has been in litigation for 14 years, and the time has come for action," U.S. Trade Representative Robert Lighthizer said. "Our ultimate goal is to reach an agreement with the EU to end all WTO-inconsistent subsidies to large civil aircraft. When the EU ends these harmful subsidies, the additional U.S. duties imposed in response can be lifted."

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The EU fired back on Tuesday, saying the amounts claimed by the U.S. were "greatly exaggerated… The figure quoted by USTR is based on U.S. internal estimates that have not been awarded by the WTO."

Both sides have agreed that the size of the duties was subject to arbitration at the WTO, the result of which is expected in the summer.

What could get more expensive?

The USTR said Monday that once that report is issued it will announce a finalized product list for tariffs, but it has already published an extensive list of items being considered, and sought public feedback. In addition to an array of helicopters, and helicopter and civilian aircraft parts from France, Germany, Spain or the United Kingdom, a lot of more familiar consumer goods could be hit.

The government's full list of items being considered for increased tariffs from any of the 28 EU member states is 13 pages long, but here is a representative glance at just a sample of the items that could get pricier on your local store shelves.

  • Fish: Salmon, swordfish, trout, herring, crabs and crabmeat, lobster and all other shellfish and shellfish products
  • Cheese: Cheddar, Roquefort, Stilton, Gruyere, Pecorino, Edam, Gouda, Swiss, Emantaler… pretty much all cheese from Europe
  • Citrus fruit: Lemons fresh or dried, oranges, mandarins, clementines, limes, even kumquats and bergamots, for all those rare fruit aficionados.
  • Olive oil: Virtually all of it, including the virgin good stuff from renowned producers in Italy, Spain and Greece, and jarred green olives in brine.
  • Booze: Wines, including Marsala, brandies Liqueurs and cordials.
  • Textiles: Cashmere sweaters, wool products, carpets and rugs, ski-suits and sportswear and bed linens.
  • Ceramics and glasses, including beer steins with pewter lids
  • Motorcycles with an engine size between 500cc and 700cc

…and the list goes on and on.