Washington, Feb 15
The US has said that it would hike tariffs on planes imported from the European Union (EU) to 15 per cent from the current 10 per cent, apparently in a move to build pressure on Brussels in a long-running dispute over aircraft subsidies.

The US Trade Representative (USTR) in a statement issued late Friday night said the increase in the duty on aircraft from European manufacturer Airbus would be effective from March 18, Efe news reported.

Lat October, President Donald Trump's administration had imposed 10 per cent tariffs on Airbus planes after the World Trade Organization (WTO) ruled in favour of the US, allowing it to compensate its losses by taxing as much as $7.5 billion of European exports annually.

The European aircraft manufacturer considers the hike illegal as it would ultimately harm US airlines and consumers who have to pay extra levies.

Airbus said it hoped the USTR's office would change its position but asserted that it would continue discussions to "mitigate effects of tariffs insofar as possible.

"USTR's decision ignores the many submissions made by US airlines, highlighting the fact that they - and the US flying public - ultimately have to pay these tariffs," it said in a statement.

The USTR statement said the government was also "making certain other minor modifications" to non-aircraft products, including cheese and wine, imported from Europe.

The US trade office said it remained open to reaching a negotiated settlement with the European Union but threatened it could revise its actions if the EU imposed tariffs.

"The US Trade Representative has also determined that going forward, the action may be revised as appropriate immediately upon any EU imposition of additional duties on US products in connection with the large civil aircraft dispute or with the EU's WTO challenge to the alleged subsidization of US large civil aircraft," the statement said.

The levies mainly affect the UK, France, Germany, and Spain.

According to the WTO ruling, the four most affected countries offered Airbus financing at a lower interest rate than the market, which allowed the company to develop some of its most recent and advanced models.

The EU is now waiting for the WTO to rule in a parallel case on the US aid to Boeing and has warned Washington that it would be forced to undertake similar countermeasures.

US says it will hike tariffs on European aircraft