USA calls for WTO meeting to fast-track tariffs on EU

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In a statement, the WTO said, "the United States may request authorization from the DSB to take countermeasures with respect to the European Union and certain member States, at a level not exceeding, in total, $7,496.623 million annually".

The ruling, the largest in WTO history, paves the way for the White House to impose tariffs and add to trade tensions in the global economy.

The EU has introduced "rebalancing" tariffs on about 2.8 billion euros ($3 billion) of USA steel, agricultural and other products.

The tariffs are expected to take effect on October 15, the official said.

Airbus shares fell as much as 1.3% hitting their lowest since June 4, while Pernod Ricard PERP.PA extended losses and was down 0.2% at 1448 GMT. The previous record of $4 billion came in 2002, when the WTO ruled against the USA over the Foreign Sales Corporation law, saying it had allowed for illegal subsidies to some US businesses.

The Trump administration is considering a particularly damaging trade weapon known as "carousel" retaliation, which would enable the regularly shift around the targeted goods, people familiar with the deliberations said last month.

It could mean tariffs on goods ranging from planes to shellfish are imposed.

The tariffs affect the decades-long conflict between US-based Boeing and EU-based Airbus, with both companies accused of illegally using government funds to compete with the other.

At a time when the Boeing is under massive global criticism following two deadly crashes of the Boeing 737 Max 8 aircrafts, the WTO arbitration award is a blessing in disguise to deflect attention away from Boeing to Airbus, said analysts familiar with the ruling.

Airbus' CEO recently said that the trade war between the European Union and the USA would be a "lose-lose game", arguing that neither side will benefit from the hikes in tariffs.

But the specter of more tariffs comes at a sensitive time.

The move, culminating a 15-year standoff, gives the Trump administration the legal cover to impose tariffs it has long threatened, escalating uncertainty for the economy at a time when the US trade war with China is weighing heavily on businesses, particularly manufacturers.

The WTO is already examining a dozen cases involving US tariffs and countermeasures brought by its trading partners over the administration's steel and aluminum tariffs. A claim the manufacturer and European governments have been fighting against for years. "Election years are bad for trade deals, " Hufbauer said.

The EU has introduced "rebalancing" tariffs on about 2.8 billion euros ($3 billion) of USA steel, agricultural and other products.

President Donald Trump and European Commission President Jean-Claude Juncker have been locked in a broader trade dispute for more than a year, but progress toward a long-term agreement has proven challenging.

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