The EU trade commissioner Valdis Dombrovskis has announced the EU will impose €3bn worth of tariffs on the US. This has been cleared by the World Trade Organisation (WTO) following its ruling in favour of the EU in its action against the US for support for American aircraft manufacturer, Boeing.

The WTO had previously ruled in favour of the US, which took an action against the EU for its support of EU aircraft manufacturer, Airbus.

As a result of that ruling, the US was authorised to apply up to $7.5bn of penalty tariffs on EU exports to the US.

While it hasn't applied the full penalty, one of the sectors targeted by the US was EU dairy exports, where a 25% tariff has been applied. This squeezes an important and growing market for Irish dairy, which was worth €419m in 2019, of which €190m was butter sales.

EU tariffs

The EU has now indicated that it will target US exports of agricultural and industrial products to the EU, including tractors and wheat.

In the press conference after a Foreign Affairs Trade Council, the commissioner said that the EU would be imposing the tariffs due to lack of progress from the US side on removing the tariffs it has imposed.

He called on the US to “agree that both sides drop existing countermeasures with immediate effect, so that we can quickly put this issue behind us.

Comissioner Dombrovskis added: "Removing these tariffs would represent a strong win-win for both sides. We now have an opportunity to reboot our transatlantic cooperation and work together towards our shared goals.”

Sources in Brussells are projecting optimism that when US president elect Joe Biden takes office in January that relations with the US will improve and that the aviation dispute will be resolved, with all tariffs being removed.