News Analysis: U.S. tariff threat an oversized blow to Italian exports

Aug 01, 2019 295

The escalation of a long-running dispute between the United States and the European Union (EU) over state-aid regulations for European aircraft suppliers could further slow Italy's already anemic economic growth rate, analysts said. The standoff between the United States and the EU dates back to 15 years ago when European member states were accused of excessive aid to support Airbus and its supply chain. The United States has argued that European aircraft subsidies have given Airbus an advantage over U.S.-based rival Boeing.

The issue has come under the spotlight in recent weeks, as U.S. President Donald Trump vowed to retaliate with taxes of up to 100 percent on European alcoholic drinks, olive oil and cheese if state aid to Airbus and other firms is not reduced. World Trade Organization arbitrators are expected to rule on whether Trump's threat is granted under rules that allow a country to impose punitive tariffs on European goods "equivalent to the value of the subsidy." 

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