The World Trade Organization (WTO) authorized today the U.S. to impose tariffs on EU-imported goods to cover an estimated annual loss of USD7.5bn in compensation for illegal state aid provided to aircraft maker Airbus. The U.S. additional duties target a total of EUR60bn of EU goods, or close to 15% of total EU exports to the US. The goods taxed are mainly planes and aircraft parts, as well as luxury products – such as wine and spirits – and leather goods. The average tariff increase is estimated at +15pp from the current 2% for these goods. Aircraft parts would be taxed at 15%, beverages at 80% and specialized machinery at more than 100%. However, as this represents only close to 3% of total U.S. imports, the impact on the total U.S. import tariff is deemed negligible (around +0.1pp to the current 8%). We estimate an annual exports loss for the EU of -USD9.7bn. The countries that are expected to lose most are France (-USD2.4bn), Italy (-USD2.1bn) and Germany (-USD1.9bn). In GDP growth terms, this would mean around -0.1pp for France and Italy. Additionally, we expect the U.S. to announce a tariff hike on EU car imports in mid-November.