The European Union (EU) will intensify its efforts with the US to put an end to the aircraft dispute, the bloc's Trade Commissioner Phil Hogan said. "The EU will intensify efforts with the US to find a negotiated solution to ongoing trade irritants. I will continue my engagement with US Trade Representative Robert Lighthizer. A resolution of the aircraft dispute should be our focus," Xinhua news agency reported citing Hogan as saying in a tweet on Thursday.

He reacted to Washington's decision to retain tariffs on aircraft manufacturer Airbus and European products over what the US claimed to be non-compliance with the World Trade Organization (WTO) decisions.

Tariffs to be Maintained By US

European Union flags
European Union flags (Representational Picture) Reuters

The US government announced on Wednesday that it has decided to maintain its 15 percent tariffs on Airbus aircraft and 25 percent tariffs on other European goods, despite moves by the EU to resolve a long-standing dispute over aircraft subsidies. The decision came after the EU said in July that Airbus had agreed with France and Spain to remove contentious benefits granted to the aircraft manufacturer.

The EU had said that this addressed the last remaining measures condemned by the WTO and thus removed any grounds for the US to maintain its countermeasures on EU exports. But Washington did not agree, with Lighthizer saying that the EU had not taken actions necessary to come into compliance with WTO decisions.

US' Accusation of Illegal Subsidies and Grants

He also hinted that Washington would initiate a new process to try to reach a long-term solution. The long-standing issue between the EU and the US began in 2004, when the latter accused France, Spain and Germany, also known as the "Airbus member states", of providing illegal subsidies and grants to support the production of a range of Airbus products.

Following prolonged legal proceedings, the WTO allowed the US to take countermeasures against European exports worth up to $7.5 billion in October 2019. The basis for this was a 2018 decision that found that the EU and the "Airbus member states" had not fully complied with previous WTO rulings with regard to Repayable Launch Investment for the A350 and A380 programs.