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On Tuesday, the European Union said it was open to negotiating with the United States over airplane subsidy disputes and was prepared to retaliate after the United States included olives, Italian cheese and Scotch whiskey on its list of goods that could be subject to substantial tariff increases.
As the Sino-US trade war has just ceased, the U.S. Trade Representative's office will resume fighting with Europe on Monday. The two sides have long argued over subsidies for Airbus in Europe (AIR. PA) and Boeing in the United States.
The United States had previously listed European goods worth $21 billion that could face tariffs, and this time added a $4 billion list of European goods to that list, sounding a wake-up call for each other's industries. Europe and the United States have been arguing over tariffs for 15 years at the World Trade Organization (WTO).
Actual total taxation is expected to be lower, as the United States has asked the WTO to approve a US$11.2 billion tax on merchandise in response to EU subsidies for Airbus. The case remains to be decided by the WTO.
But trade sources said that by expanding the list of taxable commodities to include pears, pork and other agricultural products, the United States put more pressure on the European Union, but also sent a signal of support to a vital domestic group.
Sources said that at a time when the U.S. campaign is heating up and farmers are beginning to lose patience, putting agricultural products on the list of possible taxable commodities may help alleviate the concerns of American farmers.
Navarro, Trump's trade adviser, told CNBC that the U.S. government might announce in a few weeks what goods would be subject to tariffs imposed by the United States.
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