The White House on Monday threatened to impose new tariffs on European products over subsidies to aerospace giant Airbus.

Relations between the US and the European Union have dived under President Donald Trump, in part because of his "America First" approach that emphasizes protectionist policies aimed at shoring up American industry.

Trump commented on the tariffs on Twitter on Tuesday, saying "The EU has taken advantage of the US on trade for many years. It will soon stop!"

Read more: Donald Trump's EU tariffs 'foolish' and 'damaging'

What the US Trade Representative said:

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

"This case has been in litigation for 14 years, and the time has come for action."

When the EU ends these harmful subsidies, the additional US duties imposed in response can be lifted."

Trans-Atlantic tariffs

US Trade Representative's office said a number of civil aviation sector products could be hit with tariffs, including Airbus aircraft.

The Trump administration has previously threatened to impose tariffs on European products. Last year, it briefly imposed tariffs on European steel and aluminum.

The threat comes as Boeing, the US aerospace giant, suffers major share price losses after its 737 MAX was grounded following two deadly crashes.

Read more: Boeing crash: Can machines make better decisions than people?

Does Airbus benefit from subsidies?

For years, the US has tried to pressure the EU — especially member states France, Germany, Spain and the UK — into dropping subsidies for Airbus.

In 2011, a World Trade Organization (WTO) report found that the European aerospace company had benefited from more than €16 billion ($18 billion) in subsidies from 1968 to 2006.

The EU responded by removing certain subsidies, but Washington said that wasn't enough. The US has continued to push proceedings at the WTO, which is expected to reach a result from the arbitration later this year.

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EU-US trade relationship More than a trillion euros in trade The European Union is the US' largest export market, accounting for about one-fifth of all US exports. Similarly, one-fifth of EU exports go to the United States. EU-US trade in goods and services was €1,069.3 billion in 2017. The EU imported €256.2 billion in goods from the US, and exported €375.8 billion.

EU-US trade relationship EU trade surplus The main exports and imports between the EU and US fall into the categories of machinery and vehicles, chemicals and other manufactured goods. Combined, they accounted for 89 percent of EU exports and imports with the US in 2017. In all three categories, as well as food and drink, the EU had a trade surplus. The US had a trade surplus in raw materials and energy.

EU-US trade relationship Cars, machinery top exports At €167 billion, machinery and vehicles were the largest EU export category to the US, accounting for 44.4 percent of goods exports. The €111.5 billion in machinery and transport equipment was the largest EU import from the US, accounting for 43.6 percent of imports.

EU-US trade relationship Small part of trade pie At the end of May 2018, the Trump administration imposed a 25 percent tariff on EU steel and 10 percent tariff on aluminum. Steel and aluminum exports to the United States were worth €3.58 billion in 2017.

EU-US trade relationship Retaliatory tariffs In response, the European Union developed a list of products it may subject to retaliatory tariffs. These include typical American products like peanut butter, bourbon whiskey, Harley Davidson motorcycles, jeans and orange juice. The exports targeted by the EU are worth about €2.8 billion annually, according to EU officials.

EU-US trade relationship Services include travel, education For services, the EU imports amounted to €219.3 billion and exports €218 billion. The top services were in professional and management services, intellectual property, travel and education. About a third of EU-US trade consists of intra-company transfers. Author: Chase Winter



ls/aw (AFP, dpa)