The European Union’s executive body announced on Thursday its intent to initiate a dispute with the World Trade Organization regarding the United States’ “reciprocal” tariff approach and levies imposed on cars and automotive parts.
In addition, the European Commission revealed it has begun a public consultation targeting potential countermeasures on U.S. imports valued at 95 billion euros ($107.4 billion), which would be enacted if a trade agreement is not reached with the U.S. government.
The proposed targets list includes various agricultural and industrial products, in addition to bourbon, tequila, and other spirits. This aspect has been a point of contention in transatlantic trade relations, especially following U.S. President Donald Trump’s March warning of imposing a 200% tariff on European alcohol imports. However, no specific counter-tariff rates have been disclosed as of yet.
The EU is currently aiming to negotiate terms to prevent Trump’s planned 20% reciprocal tariffs on all imports from the bloc. Furthermore, Trump has placed a 25% tariff on all imported vehicles, adversely affecting multiple European automakers, alongside a similar 25% rate on steel and aluminum.
The EU’s published list includes numerous components for aircraft and vehicles, which would impact U.S. companies such as Boeing.
“The European Union clearly believes these [U.S.] tariffs violate fundamental WTO regulations,” stated the European Commission in a press release.
“The EU’s goal is to reassert the importance of adhering to internationally agreed-upon rules, which cannot be unilaterally neglected by any WTO member, including the U.S.,” the statement emphasized.
The dispute process will commence with a formal request for consultations.
During a statement on Thursday, European Commission President Ursula von der Leyen reaffirmed, “The EU is fully devoted to achieving negotiated outcomes with the U.S. We firmly believe that beneficial agreements can be reached for consumers and businesses on both sides of the Atlantic.”
The EU has suspended an initial set of retaliatory actions agreed upon by member states in April in response to steel and aluminum tariffs, in an effort to facilitate ongoing negotiations. Should countermeasures be enacted, they are projected to affect about 21 billion euros ($24.1 billion) worth of U.S. goods, including agricultural products and apparel, primarily with a 25% tariff rate.
John Plueger, CEO of Air Lease Corp, commented on May 6 during an analyst call: “Any actions that could significantly disrupt Boeing’s aircraft deliveries to Europe, particularly alongside issues with China, would pose a serious challenge, even if the responsibility ultimately falls to the airline.”
The company specializes in purchasing Boeing aircraft and leasing them to various airlines globally.
“Persistent tariffs could encourage U.S. aerospace manufacturers to consider establishing additional production lines outside the United States for product delivery,” Plueger noted.
The United Kingdom is poised to become the first nation to finalize a trade agreement with the U.S. amidst the ongoing tariff disputes, with a formal announcement expected at 10 a.m. ET on Thursday.
— Finance Newso’s Ganesh Rao contributed to this story
