US threatens to unleash a trade war with the EU

President Donald Trump’s administration is proposing tariffs on some $11 billion in imports from the European Union in response to harm the U.S. says is being caused by the bloc’s subsidies to Boeing Co. rival Airbus SE.

In issuing the list, which includes goods ranging from jetliners and passenger helicopters to cheese, wine, ski-suits and motorcycles, the U.S. Trade Representative’s office cited the World Trade Organization’s finding that aid to Airbus has “repeatedly” caused “adverse effects to the United States.”

The USTR said in its statement on Monday evening that the Trump government will immediately begin a process under Section 301 of the Trade Act of 1974 to “identify products of the EU to which additional duties may be applied until the EU removes those subsidies.”

The threatened tariffs, which come after the WTO ruled in May that Airbus had received illegal funding for its A380 and A350 models, costing Boeing sales, would be implemented only after the WTO gave the final go-ahead this summer, the administration said, marking a rare show of faith in an institution that Trump himself has assailed.

Shares of Toulouse, France-based Airbus fell as much as 2.3 percent, the biggest drop in 2 1/2 weeks, before trading 1.7 percent lower as of 9:19 a.m. in Paris. Aerospace suppliers including Rolls-Royce Holdings Plc and Meggitt Plc were also priced lower.

The U.S. move is provocative on a number of fronts. Washington said it would impose the tariffs under the same previously dormant trade statute that it has used to justify duties on China over the past year.