France says US, EU should suspend ‘poisonous’ trade dispute as Trump leaves

French Foreign Minister Jean-Yves Le Drian says the European Union and the United States should suspend their long-running trade dispute in an attempt to find a way to settle their argument.  

"The issue that's poisoning everyone is that of the price escalation and taxes on steel, digital technology, Airbus and more particularly our wine sector”, Le Drian told French weekly newspaper Le Journal du Dimanche on Sunday.

He further expressed hope that the EU and the incoming administration of US President-elect Joe Biden could find common ground, noting that "It may take time, but in the meantime, we can always order a moratorium”.

Le Drian’s remarks come as the Trump administration has said it plans to impose more tariffs on French and German products amid a 16-year US-EU dispute over subsidies for aircraft manufacturers Airbus and Boeing.

US imposes new tariffs on French, German products in Airbus-Boeing spat

The United States announced Wednesday that it will impose additional tariffs on French and German products.

The US Trade Representative (USTR) announced in a statement on December 31 that the tariffs are on "aircraft manufacturing parts from France and Germany" among other products.

The decision, the latest twist in the trade battle that turned increasingly sour under the administration of President Donald Trump, came despite hopes for a trade truce following Joe Biden's election win.

The move, which will add the new products to the list of those taxed since 2019, was in retaliation to tariffs imposed by the European Union.

In November last year, the World Trade Organization (WTO) authorized the EU to levy additional customs duties on American imports amounting to almost €3.4 billion ($4 billion) a year.

That move came in response to unjust US aircraft subsidies, but Washington believes the bloc had unfairly calculated tariffs against the US.

Washington has already imposed a 25% tariff on a raft of European goods, and a 10% tariff on aircraft.

The Trump administration, which leaves office on Wednesday, warned in December that it would raise those tariffs and expand the list of affected products.

France, Germany say EU will respond in kind to new US tariffs

France and Germany say the European Union will respond reciprocally to any additional US tariffs on the bloc’s products.

Trump had also threatened to impose tariffs on French cosmetics, handbags and other goods in response to France's tax on US digital companies.

This is while the EU has decided to hold off on retaliation for now.

The bloc is planning to present a World Trade Organization reform proposal in February and is willing to consider reforms to restrain the judicial authority of the WTO's dispute-settlement body.

The United States has for years complained that the WTO’s Appellate Body makes unjustified new trade rules in its decisions and has blocked the appointment of new judges to stop this, rendering the body inoperable.

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