Aerospace companies could be among the victims of the US tax haven dispute as the European Union (EU) prepares a final target list for punitive sanctions. The list has not yet been published - it needs to be cleared by EU member states - but aluminium is believed to be one of the products set to be subject to punitive tariffs, which could be set as high as 100%.
However, other aerospace products are likely to be exempt after Airbus lobbied the EU not to harm US companies which also supply the European manufacturer (Flight International, 15-22 October 2002).
The dispute stems from a 30-year-old tax loophole that has, the World Trade Organisation (WTO) believes, given US exporters a $4 billion advantage over their European rivals. The WTO judged in favour of the EU last year and cleared the Europeans to impose sanctions.
EU trade commissioner Pascal Lamy is in Washington this week to discuss the issue, but despite the appeals of US trade representative Robert Zoellick to Congress last week to comply with WTO rules, Capitol Hill is wary of raising taxes on troubled manufacturers such as Boeing.
Source: Flight International