The EU is a strong alliance of advanced economies whose overall GDP represents 22% of the global economy. It goes without saying that the EU is equally powerful rival as the US in any economic war. With the vast arsenal of lawful tools, the EU could have the last word, for instance, in a war of sanctions.
Europe’s trade commissioner Phil Hogan stated that the EU would take resolute countermeasures against the US unless it settles the long-lasting dispute over aircraft subsidies. Importantly, the EU was willing to solve the argument peacefully but its proposals were twice rejected by Washington. The White House launched “Section 232” investigations aiming to assess the impact of imports on US national security. Shortly after, Washington came up with tariffs on metal imports from the EU and threatened to impose tariffs on EU-made cars. In response, the European Commission commented that such moves were unacceptable. Trump’s administration believes that new tariffs will safeguard the US national interests. In contrast, the EU is certain that such tariffs encourage unhealthy competition. “If these investigations go further the European Union will have to stand together and act as well,” Phil Hogan expressed the official stance.
The row between the US and the EU over subsidies to national aircraft manufacturers dates back to 2004. US-based Boeing brought up claims against some European countries at the summit of the World Trade Organization. The US targeted those countries as they allegedly breached international trade practice and applied non-market support measures to its competitor, Airbus. The EU challenged that claim with the WTO. Since then, the rivals have been engaged in the long-running dispute.
