"EU to Impose Tariffs on Boeing Aircraft if Negotiations with US Fail"

US Already Imposes 10% Tariff on Airbus

Trump Imposed Tariffs on Airbus in 2019 Over Subsidy Issues

The Financial Times (FT) reported that the European Union (EU) plans to impose tariffs on Boeing aircraft imports if trade negotiations with the United States fail.

According to the newspaper on the 7th (local time), the EU plans to include aircraft in the list of US imports worth about $100 billion subject to tariffs as an additional retaliatory measure if trade negotiations with the US fail. The source cited by FT added that this measure must be approved by a majority vote of the member states and will only take effect if trade negotiations with the US fail.

The EU is subject to a 25% tariff on steel, aluminum, and automobiles exported to the US. It has also imposed a reciprocal 10% tariff on Airbus aircraft, among others. If the 90-day grace period expires on July 8, this tariff could be increased to 20%.

European airlines have placed orders for hundreds of jets from US-based Boeing. If tariffs are imposed, the price of Boeing aircraft is expected to rise.

The CEO of Airbus has argued that Europe should impose equivalent tariffs on Boeing aircraft. The EU expects that by taking reciprocal measures against the US, which has already imposed a 10% tariff on Europe's Airbus, the competitive environment will be equalized.

In 2019, the Trump administration imposed a 10% tariff on the European aviation sector. In 2020, this tariff was raised to 15%. The World Trade Organization (WTO) ruled that the EU had illegally subsidized Airbus, and subsequently concluded that the US had also illegally subsidized Boeing, leading the Biden administration to suspend tariffs in 2021.

In 2020 and 2021, all European and American airlines jointly demanded the abolition of tariffs in the aircraft sector.

Guest reporter Kim Jung-ah kja@hankyung.com