European stocks edge lower as threat of United States tariffs hits Airbus, suppliers

Trump threatens to tariff EU cheese wine helicopters over Airbus subsidies

The Trump administration has threatened tariffs on some $11 billion in imports from the EU

The move by the US trade representative follows separate WTO findings that both Boeing and Airbus ― which compete in the commercial jetliner market ― are subsidized.

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

The Trump administration has threatened to slap tariffs on $11 billion worth of imports from the European Union, in retaliation for subsidies that the European Union reportedly gave to Airbus.

The move would mark an escalation in trade tensions between the United States and the EU.

"The amount is largely exaggerated and in any case will be defined by the WTO and not the U.S".

The threatened American tariffs, which come after the WTO ruled in May that Airbus had received illegal funding for its A380 and A350 models, costing Boeing sales, would be implemented only after the WTO gave the final go-ahead this summer, the administration said, marking a rare show of faith in an institution that Trump himself has assailed.

"The EU has taken advantage of the USA on trade for many years".

The EU is already facing USA tariffs on its steel and aluminum exports and Trump has repeatedly threatened to hit EU cars with punitive duties.

The tariff talks on European Union products come at the same time Alabama-based vehicle manufacturers are anxious about an ongoing trade war between the US and China regarding a 25% tax on foreign automobiles and auto parts.

"It will soon stop!" he wrote.

Trump's declaration aside, the new list of tariffs would not take effect until after a WTO arbiter rules on the allowable size of the tariff package, a decision not expected for several months.

The European Commission said on Monday (18 February) that the EU will respond in a "swift and adequate manner" to the possibility that the USA may impose tariffs on European cars, following the submission of a U.S. report on whether auto imports represent a national security threat.

Airbus shares fell 1.86 percent and many of its key suppliers lost between 0.7 percent and 1.2 percent.

Airbus is headquartered in Toulouse, France, and also has locations in the United States, including engineering centers in Wichita, Kansas, and Mobile, Alabama, a training center in Miami, and headquarters in Herndon and Ashburn, Virginia.

"Get ready for more tit-for-tat scrapping to follow", said John Woolfitt of London brokerage Atlantic Markets.

Benchmark U.S. 10-year Treasury notes rose 5/32 in price to push yields down to 2.4989 percent. The United States is a major market for Volkswagen, Mercedes maker Daimler and BMW.

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.

"Our ultimate goal is to reach an agreement with the European Union to end all WTO-inconsistent subsidies to large civil aircraft", Lighthizer said.

Fabiana Fedeli at Robeco sees the latest moves as tactical. The EU has taken advantage of the US on trade for many years.

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