US threatens tariffs on $11 billion of European goods over Airbus subsidies

The United States Trade Representative proposed levies on hundreds of categories of exports on Tuesday in retaliation for the European Union allegedly providing subsidies to Airbus (EADSF).

The goods range from Airbus jets and their components to European staples like wine, cheese and frozen fish. These exports are worth about $11 billion every year to European countries, roughly equal to the damage the United States believes the subsidies inflicts on Boeing (BA) and the US economy.

"When the EU ends these harmful subsidies, the additional US duties imposed in response can be lifted," US Trade Representative Lighthizer said in the statement.

The proposed tariffs are subject to public consultation in the United States and arbitration at the World Trade Organization, which is expected to deliver its findings in the summer.

The dispute dates back to 2004, when EU authorities said Boeing received $19 billion in unfair subsidies from federal and state governments between 1989 and 2006. The US government filed a similar claim that year over European subsidies to Airbus. Since then, the WTO has handed down rulings in favor of both sides.

"Our ultimate goal is to reach an agreement with the EU to end all WTO-inconsistent subsidies to large civil aircraft," Lighthizer added Tuesday.

A European Commission source told CNN Business Tuesday that the level of tariffs proposed by the US Trade Representative was "greatly exaggerated" and could only be determined by the WTO.

"The EU remains open for discussions with the US, provided these are without preconditions and aim at a fair outcome," the source added.

American threats to hit the European Union with tariffs come amid rising trade tensions between the bloc and President Donald Trump's White House.

Trump is considering whether to impose tariffs of up to 25% on European vehicle imports, a threat that has unnerved automakers in the industrial powerhouse of Germany.

The US has already imposed tariffs on European steel and aluminum exports.

The trading relationship between the two sides is worth more than $1 trillion annually, but Europe exports significantly more goods to the United States than the other way around.

Ivana Kottasova contributed to this report.

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