/U.S. tariffs on French, German aircraft parts, wines to start Tuesday
U.S. tariffs on French, German aircraft parts, wines to start Tuesday

U.S. tariffs on French, German aircraft parts, wines to start Tuesday

The USA flag and the European Union flag are flown during the 2019 Solheim Cup at Gleneagles Golf Club, Auchterarder.

Jane Barlow | PA Images via Getty Images

The U.S. government on Monday said it would begin collecting new duties on aircraft parts and other products from France and Germany from Tuesday after failing to resolve a 16-year dispute over aircraft subsidies with the European Union.

In a notice late on Monday, U.S. Customs and Border Protection said the new duties would apply from 12:01 a.m. ET (0501 GMT) on Tuesday as part of the long-running battle over government subsidies to Europe’s Airbus and its U.S. rival, Boeing.

The notice follows an announcement by the U.S. Trade Representative’s office that it would impose an additional 15% tariff on aircraft parts, including fuselage and wing assemblies, and a 25% duty on certain wines.

Talks between Washington and Brussels to end the battle stalled in the final weeks of the Trump administration, a European source familiar with the matter said. Washington had also pressed to reach a separate solution with Britain, which has a share in Airbus, but has exited the EU.

Brussels said it would seek swift resolution of the issue with U.S. President-elect Joe Biden, who takes office on Jan. 20. The Biden team had no immediate comment on the tariff issue.

Airbus said USTR’s expansion of tariffs to include aircraft components made in France and Germany was “counterproductive” and would wind up harm U.S. workers at its Mobile, Alabama site where it assembles A320 and A220 aircraft.

The measure will hit A320 production which relies on components from France and Germany, while the A220 production does not, according to an Airbus spokesman.

The initial impact may be muted since aerospace companies generally procure large components such as wings and fuselages well in advance to ensure smooth production flows.

Both Washington and Brussels have won cases at the World Trade Organization, the former allowed to impose tariffs on $7.5 billion of EU goods and the latter extra duties on $4 billion of imports from the United States.