Davis Index: Market Intelligence for the Global Metals and Recycled Materials Markets

The European Union (EU) and the US have locked horns again over aircraft subsidies and tariffs with the EU threatening to escalate the 15-year old tariff war if the dispute is not settled by the US.


According to media reports, the EU’s trade commissioner, Phil Hogan, said that Europe would act decisively if it did not get the expected outcome from this US in settling the dispute. He also disapproved of the Sec 232 investigations being conducted by the US Department of Commerce on many of the steel products exported from the continent to the US. 


At the heart of the matter lies the dispute over subsidies being provided by the EU to European aviation giant Airbus, and by the US to the American aviation company Boeing. Both these companies are involved in the import and export of aviation parts among the concerned parties. 


In 2004, The World Trade Organisation (WTO) ruled that the EU’s subsidies to Airbus were illegal. An investigation is currently underway regarding the US’ subsidies to Boeing. 


The US levied 15-25pc duty on EU imports last year, in light of the WTO ruling. In June, The Commerce also revealed that it was considering ad-valorem taxes on EU trade, worth $3.1bn per year. This comment has led to Hogan retaliating with warnings of an escalation in tariffs on American products being exported to Europe. 



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