Trade Commissioner: EU will ‘act decisively’ if US slaps fresh tariffs on goods

Phil Hogan’s stark warning follows the US threat to put duties on EU goods such as beer, gin and olives, intensifying a long-running row over aviation subsidies between the two sides.
Phil Hogan | Photo credit: European Commission Audiovisual

By Martin Banks

09 Jul 2020

Last year, the US imposed tariffs of 15-25 percent on $7.5bn worth of European goods. In June this year, in a move which has caused concern in Brussels, the US said it was considering new taxes on additional EU trade worth $3.1bn annually.

Phil Hogan, who was speaking via video link to MEPs on Parliament’s international trade committee, said, “The ball is in their [the US’] court. But when it comes to the Boeing case, I want to reassure you that the EU will react decisively and strongly if we don’t get the outcome we seek on what is a 15-year-old dispute.”

The World Trade Organization (WTO) has ruled that EU subsidies to European plane maker Airbus in 2004 were illegal but the WTO is also considering a similar case involving illegal support for US aerospace firm Boeing, which could see the EU impose duties on the US later this year.

“If these [US] investigations, into everything from steel products to trains, go any further then the EU will have to stand together and act as well” Phil Hogan, EU Trade Commissioner

Hogan also used his appearance at the hearing to criticise new US national security investigations against EU goods. Known as 232 investigations, these cover products from transformers and mobile cranes to steel nails.

He told the committee on Monday, “The number of 232 investigations that have been launched in recent weeks is not appreciated. Perhaps it is political, but this is totally unacceptable. If these investigations, into everything from steel products to trains, go any further then the EU will have to stand together and act as well.”

The dispute, he said, highlighted the “difficulty” of managing the EU's relationship with the US.

He was taking part in a debate by the Committee on a revision of the EU’s rights on the enforcement of international trade rules.

Commenting on the revision, Greek MEP Anna-Michelle Asimakopoulou, EPP spokeswoman on international trade, said, “We need tools that guarantee our strategic autonomy against Chinese unfair competition or President Trump’s out-of-control tariff diplomacy. In the event of a trade attack, the EU cannot afford to remain passive. The EPP is ready to put on the boxing gloves when trade is at stake.”

The revision of the law aims to protect EU interests when third countries, with the US cited by the EPP as an example, unilaterally adopt restrictions in access to their market and simultaneously block the WTO’s dispute settlement process.

Asimakopoulou, Deputy Chair of the Committee, said, “We want to give teeth to the system by allowing the EU to use legal tools to respond when a third country threatens our commercial interests or strategic autonomy and breaches international law or violates its trade obligations towards Europe.”

Such “tools” could include customs duties, quantitative restrictions on the import or export of goods and measures in the field of public procurement.

“We need tools that guarantee our strategic autonomy against Chinese unfair competition or President Trump’s out-of-control tariff diplomacy. In the event of a trade attack, the EU cannot afford to remain passive. The EPP is ready to put on the boxing gloves when trade is at stake” Anna-Michelle Asimakopoulou, EPP spokeswoman on international trade 

She added, “Obviously, we want to protect the primacy of international law and will ensure that the EU can only act once it has used the relevant dispute settlement mechanisms. This would have been the case, for example, in the Boeing/Airbus dispute, where the EU is unable to impose tariffs on US products swiftly, since the procedure at the WTO is still ongoing.”

Meanwhile, Pascal Lamy, a former Director General of the WTO, has urged the EU to “bring China more into the tent” in its trading relations with Beijing.

The former EU commissioner, speaking at the same meeting as Hogan, said there was a “delicate balance” to be struck when opening trade.

The EU, he said, remains the “bulwark” of a global “rules-based trading system,” adding that “our Chinese friends have to understand the need for strong WTO rules or accept that their trade with the rest of the world will not be as open as it used to be.”

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