Trump threatens EU with $11bln sanctions

The US action comes as Boeing’s 737 Max fleet is grounded

The United States is threatening the European Union with billions of euros worth of trade sanctions on a wide range of products, in retaliation for EU subsidies to Airbus.

A preliminary list of items has been drawn up by the Trump administration. It threatens to increase tensions over trade between Europe and the United States.

It comes amid a long-running dispute over aid granted to the rival plane giants Airbus and Boeing, and follows a recent international ruling against Washington.

The US Trade Representative (USTR) says in a statement that it is acting over World Trade Organisation (WTO) rulings that have found the aid granted to the European plane manufacturer has caused “adverse effects” to the United States.

Washington estimates the value of those subsidies to be $11.2 billion (€9.95 billion), a figure disputed by the EU.

The USTR cites damage from “launch aid” subsidies granted to promote new large European aircraft, which have been judged to have damaged sales of rival Boeing planes.

The WTO agreed last year to evaluate the US request to impose sanctions on EU products, and an arbitration ruling is due this summer.

The US action comes as Boeing’s 737 Max fleet is grounded, and follows a WTO ruling in late March which found the US had given unfair tax breaks to Boeing.