Ruling in Airbus-Boeing row threatens new tariffs on United States imports

Ruling in Airbus-Boeing row threatens new tariffs on United States imports

The European Commission said it would pull back from imposing tariffs if Washington withdrew tariffs on European goods such as wine and whisky. The move comes nearly exactly a year after a similar approval was made for the USA to tax goods imported from the EU.

The result parallels an earlier ruling against the EU allowing USA tariffs that for the past year have increased the price of many European products sold here, including Airbus jets.

The arbitrators were tasked with setting a dollar value in sanctions such as tariffs that the European Union could impose after the WTO's appellate body found past year that Boeing had received at least $5 billion in subsidies that were prohibited under worldwide trade rules.

The latest WTO decision is final, can not be appealed, and puts the final word on a standoff dating back to 2006.

Any tariffs would make the several hundred aircraft ordered by European airlines even more expensive.

Combined, the two cases represent the world's largest-ever corporate trade dispute. It is just one part of a string of long-running disputes between the two plane-making giants at the WTO.

Despite the tit-for-tat tariff decision, there was no celebration in the Airbus camp.

"Airbus did not start this WTO dispute, and we do not wish to continue the harm to the customers and suppliers of the aviation industry and to all other sectors impacted", he said.

"As we have already demonstrated, we remain prepared and ready to support a negotiation process that leads to a fair settlement".

The latest chapter in the mammoth dispute rattled the spirits industry on both sides of Atlantic, which urged restraint and an end to tariffs. "Rather than escalating this matter with threats to US businesses and their European customers, Airbus and the EU should be focusing their energies on good-faith efforts to resolve this long-running dispute".

The ruling is seen as the final stage in a 16-year battle between Airbus and Boeing being fought by proxy through their governments, with each claiming the other received illegal support to help produce aircraft.

The fight between the European Union and USA over their respective subsidies for Airbus (AIR.PA) and Boeing has been raging for around 16 years, with both sides accusing the other of illegal support of their aircraft manufacturers. The parallel case came to a head in the fall of previous year and saw tariffs slapped on a host of European exports, including wine, cheese and, of course, aircraft parts. The EU filed a second complaint over subsidies to Boeing in 2014.

On top of Tuesday's $4bn, European sources have said the EU could also use dormant tariffs on a further $4bn of United States products left over from an earlier case, giving it firepower similar to that which Washington is able to use.

The most-traded goods a year ago included medical and pharmaceutical products, engines and motors, and aircraft and associated equipment. The bloc could aim for areas where Boeing planes or parts are made.

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