Macron ally warns Trump France will ‘react with sanctions’ after £6billion EU tariff hit

French Finance Minister Bruno Le Maire said on Thursday that Paris and Brussels were ready to respond with counter-sanctions if the United States rejected the olive branch offered by Europe in the Airbus trade row. “If the American administration rejects the hand that has been held out by France and the European Union, we are preparing ourselves to react with sanctions,” M Le Maire said in a statement. On Wednesday, the World Trade Organisation (WTO) gave Washington a green light to impose tariffs on £6.1 billion ($7.5 billion) worth of EU goods annually over illegal EU subsidies handed over to the France-based planemaker – a move that threatens to spark a tit-for-tat transatlantic trade war. Reacting to the news on Wednesday evening, M Le Maire said that US sanctions would be a “political and economic mistake” as he called for the dispute to be resolved “amicably”.

“We hope to reduce existing tensions and avoid trade sanctions that would only hurt both our economies,” he continued, before promising a “firm” response from Brussels.

Government spokeswoman Sibeth Ndiaye, for her part, said that Paris would “obviously impose retaliatory tariffs” on Washington “in consultation with the EU”.

“I regret that we have become embroiled in this trade war with the United States, because, if we make war, we are unlikely to experience a rise in collective growth,” she told the news channel BFMTV.

Washington, for its part, announced punishing tariffs on billions of dollars’ worth of EU goods within hours of the WTO ruling.

US President Donald Trump told reporters: “It was a big win for the United States.”

The target list includes 10 percent tariffs on large Airbus planes made in France, Britain, Germany and Spain – the four Airbus consortium countries.

However, no tariffs will be imposed on EU-made aircraft parts used in Airbus’ Alabama assembly operations or those used by rival US aeroplane maker Boeing in an effort to protect US manufacturing jobs.

The US will also slap duties on French wine, Spanish olives, British whisky, German coffee and cheese from across the bloc starting October 18.

“Finally, after 15 years of litigation, the WTO has confirmed that the United States is entitled to impose counter-measures in response to the EU’s illegal subsidies,” US Trade Representative Robert Lighthizer said in a statement.

He continued: “For years, Europe has been providing massive subsidies to Airbus that have seriously injured the US aerospace industry and our workers…We expect to enter into negotiations … aimed at resolving this issue in a way that will benefit US workers.”

Although the WTO ruling allows Washington to penalise the bloc with duties of up to 100 percent, the US has chosen not to apply the maximum rate, but “has the authority to increase the tariffs at any time, or change the products affected,” Mr Lighthizer’s office added.

Earlier this year, Washington floated a £20.2 billion ($25 billion) tariff list that included EU helicopters, major aircraft components, seafood, luxury goods and other big-ticket categories that were removed from Wednesday’s announcement.

But the EU-US trade spat is set to worsen.

Airbus spokesman Clay McConnell said the EU planemaker was evaluating the list and its possible consequences in “close collaboration with the European Commission”.

The WTO, he added, will in the coming months allow Brussels to impose tariffs on US goods over its findings of illegal subsidies for Boeing from Washington state that could equal or exceed the US levies.

Airbus and Boeing, the world’s two largest aeroplane makers, have waged a war of attrition over subsidies at the WTO since 2004.

The global trade body has already ruled that the rivals had both received billions of dollars of illegal subsidies.

source: express.co.uk