(Bloomberg) --
The European Union hasn’t given up hope of reaching a deal with the U.S. that would avoid an escalation of the sides’ trade dispute over Airbus subsidies, European Trade Commissioner Cecilia Malmstrom said.
“Until the American tariffs take effect, we haven’t given up” on the idea of reaching a “negotiated solution,” Malmstrom said on the sidelines of an event in Stockholm on Thursday. In the meantime, “we are looking at all options and we are discussing that with member states.”
The EU’s trade officials are plotting their response after the U.S. announced punitive tariffs on billion of dollars worth of goods including cheese, wine and scotch. The World Trade Organization this week gave President Donald Trump the go ahead for duties on as much as $7.5 billion of EU exports -- the biggest award in its history -- as retaliation for illegal state aid that EU governments paid to Airbus.
The dilemma facing Malmstrom and EU leaders is whether they should up the ante in the tit-for-tat with Trump. European officials have drafted a plan to target $4 billion of U.S. goods citing a WTO case from 22 years ago.
While triggering that option would signal to the White House that the EU will defend its interests, such a move would also undermine the WTO itself at a time when the organization is already under siege from the U.S. administration.
Malmstrom said EU member states will discuss what shape or form their response should take “later this fall.”
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