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AIR - Airbus SE News Story

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Sector
Industrials
Size
Large Cap
Market Cap £64.83bn
Enterprise Value £67.12bn
Revenue £42.76bn
Position in Universe 14th / 850

UPDATE 1-EU bets on Biden to resolve aircraft subsidy row

Thu 31st December, 2020 12:49pm
* New U.S. tariffs set for Jan. 12
    * U.S. expands list over EU retaliation it sees as excessive
    * Airbus says it trusts Europe will respond "appropriately"
    * French wine exporters call new tariffs a sledgehammer 

 (Upates with Commission, UK, Airbus production in U.S.)
    By Philip Blenkinsop
    BRUSSELS, Dec 31 (Reuters) - The European Union will seek a
swift resolution of a 16-year battle over aircraft subsidies
with incoming U.S. president Joe Biden, saying that new U.S.
tariffs have damaged talks with the Trump administration.
    The Commission, which coordinates trade policy for the
27-nation European Union, said on Thursday that the U.S. action
had "unilaterally" disrupted ongoing negotiations about
respective state subsidies for European planemaker Airbus
 AIR.PA  and its U.S. rival Boeing  BA.N .
    "The EU will engage with the new U.S. administration at the
earliest possible moment to continue these negotiations and find
a lasting solution to the dispute," it said in a statement.
    The office of the U.S. Trade Representative (USTR) said on
Wednesday it was adding aircraft components such as fuselages
and wings, and wines and brandy from France and Germany onto a
list of goods subject to tariffs, responding to what it said was
unfair EU retaliation.  urn:newsml:reuters.com:*:nL1N2JA29L
    Both Washington and Brussels have won cases at the World
Trade Organization, the former allowed to impose tariffs on $7.5
billion of EU goods and the latter extra duties on $4 billion of
imports from the United States.
    The USTR said the EU tariffs, imposed in November, had been
distorted by basing them on trade depressed by the COVID-19
pandemic, and because Britain had been cut from the calculation
even though it had applied the measures throughout 2020.
    In a statement, Airbus said Europe should respond
"appropriately".
    
    "SLEDGEHAMMER" FOR FRENCH WINE
    The new tariffs are part of a 16-year transatlantic battle
over aircraft subsidies that both U.S. and European negotiators
had recently talked about ending. They will apply from Jan. 12,
eight days before Biden succeeds Trump as U.S. president.
    Aircraft are already covered by U.S. tariffs, but the
addition of components closes a loophole that had allowed Airbus
planes assembled in Mobile, Alabama, to be sold in the United
States free of tariffs. As a result, those aircraft are likely
to be uncompetitive in the U.S. market.  urn:newsml:reuters.com:*:nL1N2IP2H8
    Likewise, some alcohol from the Airbus-producing nations -
France, Germany, Spain and Britain - was already subject to
tariffs, and other varieties have now been added. The French
wine exporters' federation called it a "sledgehammer" blow.
 urn:newsml:reuters.com:*:nL1N2JB0I3
    The United States is the largest market for European
spirits. Share broker Jefferies estimated a 6% hit to Remy
Cointreau  RCOP.PA  profits, but less than 1% for Campari
 CPRI.MI , Diageo  DGE.L  and Pernod Ricard  PERP.PA .
    Remy Cointreau and LVMH  LVMH.PA , which makes the world's
top-selling cognac, Hennessy, had no immediate comment. Pernod
Ricard declined to comment.
    Britain and Spain were spared additional tariffs.
    Britain said its decision to suspend retaliatory tariffs
against the United States from Jan. 1, part of its new-found
freedom outside the European Union, was already paying off.
However, existing tariffs on some British goods such as Scottish
whisky remain in place.  urn:newsml:reuters.com:*:nL8N2JB12T

 (Reporting by Philip Blenkinsop, additional reporting by Will
James in London, Sybille de La Hamaide, Dominique Vidalon and
Sarah White in Paris; Editing by Kevin Liffey)
 ((philip.blenkinsop@thomsonreuters.com; +32 2 585 2869; Reuters
Messaging: philip.blenkinsop.thomsonreuters.com@reuters.net))
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