Boeing trade case sets up USA to impose tariffs on EU

Airbus A380

Airbus A380

Unless the European Union stops "harming US interests", this sanction will not be removed.

"The WTO appellate body has definitively rejected the US challenge on the bulk of European Union support to Airbus, and agreed that the European Union has largely complied with its original findings", European Union trade commission Cecilia Malmstrom said in a statement.

The EU has brought two such cases against the U.S. One case ended in favor of the U.S., and in the other, like in the Airbus case, the majority of the allegations the EU made against the U.S. and Boeing were dismissed. Airbus alleges $13.7 billion in illegal tax breaks for Boeing between the 787 and 777 aircraft.

The findings of Tuesday wrapped up a case against the European Union dating back to 2004 and means that the USA can now seek WTO backing to impose sanctions on an as yet unspecified list of European goods.

The litigation adds to the tension between the U.S. and Europe, two once-cooperative trade partners that are already sparring over U.S. President Donald Trump's steel and aluminum tariffs and his decision to back out of a nuclear treaty with Iran, jeopardizing $40 billion in aircraft sales. "Now that the WTO has issued its final ruling, it is incumbent upon all parties to fully comply as such actions will ultimately produce the best outcomes for our customers and the mutual health of our industry".

The WTP decision affirmed a ruling that France, Germany, Spain and the United Kingdom have failed to adequately remedy market-distorting aid for the launch of Airbus's A380 superjumbo, infrastructure support and equity investments that unfairly benefited the plane-maker. "The commercial success of products and services should be driven by their merits and not by market-distorting actions", said Boeing head Dennis Muilenburg.

Boeing said it anticipated that U.S. tariffs up to the amount of harm from the subsidies could be scheduled as early as 2019.

It said in a statement that, "This is expected to be the largest-ever WTO authorization of retaliatory tariffs".

"Boeing is now at more than 90% failed claims".

Airbus said in a statement released after the WTO ruling that it would take steps to ensure the aid complies with the decision, and predicted any eventual sanctions would be minor.

The CEO of Airbus, Tom Enders said, "Today's report is really only half the story".

Boeing hailed the "landmark ruling" from the WTO and said that the decision cleared the way for tariffs against European imports to the US.

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