The European Commission has launched a consultation regarding retaliatory tariffs for U.S. subsidies provided to Boeing after a recent WTO ruling. While part of the normal process for following WTO rules the move comes just as the U.S. has launched a similar review for retaliation against EU subsidies for Airbus.

As discussed in Panjiva’s research of Apr. 9 the competing reviews will likely jeopardize wider trade negotiations between the two parties. From a timing perspective the European Commission’s review is more pressing, with an initial deadline for comments set at May 31.

Panjiva analysis shows that the EU has identified 387 tariff lines (HS-8) for potential retaliation.

While the EU has stated that the targets cover $20 billion of U.S. exports an HS-6 abstraction of the figures suggests the value of exports in 2018 were nearer $14.9 billion. The U.S. section 301 review list covers 326 products with a value of $23.8 billion. The major difference between the two is that the U.S. list targets $9.03 billion of aerospace products whereas the EU has only targeted $154 million worth in this action.

As expected the EU has targeted commodities as a major part of its retaliation. The largest product line targeted is coal worth $4.0 billion in 2018. That’s followed by a wide-range of organic chemicals and plastics worth $3.37 billion. Food and beverages are also a significant area of targets including $704 million of fish, $774 million over beverages – principally wine – as well as a range of iconic prepared foods worth $716 million including ketchup.

Chart segments U.S. exports to the EU targeted for new tariffs by industry.   Source: Panjiva

The targets don’t just include commodities however. Capital goods have also been targeted, potentially as a direct match to construction and agricultural machinery included in the U.S. section 301 review. U.S. exports of engines, construction machinery and tractors to the EU targeted were worth $1.65 billion in 2018. That’s also a product group that has seen significant growth in the past two years.

Panjiva data shows leading exporters of the products targeted in the 12 months to Mar. 31 include Deere & Co., Stihl and Cummins. Additionally motorcycle parts have also been put on the list which would add to the pain for Harley Davidson after its bikes were targeted for retaliatory duties against section 232 steel and aluminum duties in 2018.

Chart segments U.S. exports to the EU targeted for new tariffs by product.   Source: Panjiva