Boeing trade case sets up United States to impose tariffs on EU


On Tuesday, the WTO ruled as the European Union had ignored the requests of halting all subsidies to the plane maker Airbus which has prompted United States to threaten sanctions against the European products.

The WTO appellate body upheld the compliance panel's finding in 2016 that Airbus paid a lower interest rate on financing for the development of its latest aircraft, the A350, than it would have obtained on the commercial market, and that this below-cost financing provided by the French, German, Spanish and United Kingdom governments provided a benefit to Airbus that constituted subsidies.

U.S. trade representative Robert Lighthizer said: "Unless the European Union finally takes action to stop breaking the rules and harming USA interests, the United States will have to move forward with countermeasures on European Union products".

Airbus now has a case pending at the WTO accusing the U.S. of providing illegal support for Boeing.

The authorized tariffs are likely to total billions in duties per year, unless and until Airbus addresses the illegal subsidies it received from European governments for its most recently launched airplanes.

"The other half coming out later this year will rule strongly on Boeing's subsidies and we'll see then where the balance lies", he said.

Boeing said the United States is expected to levy billions of retaliatory tariffs on the European exports, possibly the largest ever, which could come as early as 2019.

"Today's final ruling sends a clear message: disregard for the rules and illegal subsidies is not tolerated".

The WTO ruling did reverse parts of a 2016 decision, finding no fault in the development of the A320 and A330 jets. Boeing claims that the EU provided the European aerospace giant more than $22 billion in illegal subsidies.

The remaining claim in front of the WTO alleges illegal tax breaks for the 787 and 777.

The WTO decision on the latest in a string of tussles between Europe's Airbus and U.S. rival Boeing comes as the Trump administration has exerted intense pressure on the Geneva-based organisation over what the president alleges is its "unfair" treatment of the United States.

Airbus chief executive Tom Enders called the ruling a "significant legal success for the European aviation industry". He added, "Despite Boeing's rhetoric, it is clear that their position today is straightforward healthy: They have half the market and a full order book, they have clearly not been damaged by Airbus repayable loans".