Boeing: WTO Ruling Could Lead To Biggest Retaliatory Tariffs Ever

It is the latest in a string of tussles between Europe’s Airbus and US rival Boeing

In the long-running subsidies spat between Airbus and Boeing, the World Trade Organization (WTO) has determined in a first ruling that the European Union (EU) failed to stop illegal subsidies used to support the Airbus A380 and A350 programs.

But the WTO still has to make a final ruling on separate allegations from the European Union that Boeing was provided illegal subsidies from the USA government.

In 2004, the United States lodged its original complaint with the WTO, claiming support of Airbus by France, Germany, Spain and the United Kingdom for the development of civilian airliners was unfair because it hurt US -based Boeing's sales and market share.

However, the Geneva watchdog dismissed US claims that loans for Airbus's most popular models, the A320 and A330, were costing Boeing significant sales and in so doing narrowed the scope of one of the world's longest and costliest trade spats.

The decision could further ramp up tensions between the USA and Europe, which have been stoked by President TrumpDonald John TrumpAvenatti defends right to release Cohen's financial info Pruitt's 24/7 security requested over fears of Trump policy backlash Senate GOP anger over McCain insult grows MORE's criticism of EU trade policies, his refusal to provide a permanent exemption for tariffs on European steel and aluminum imports and last week's decision to leave the Iran nuclear deal.

Airbus shares closed down 0.9 percent.

A World Trade Organization (WTO) ruling on Tuesday is opening the door for the United States to impose tariffs on European products, in what is likely the end of the 14-year-old trade battle. That figure includes the many subsidies that the WTO said were lawful.

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The size of USA tariffs to be allowed will be determined through a WTO arbitration process, and will be based on the annual harm to US and Boeing - losses that the USA had previously pegged as ranging from $7 billion to $10 billion a year.

"Today's report is really only half the story", said Airbus Chief Executive Tom Enders.

Boeing says Airbus received illegal aid worth $22 billion, including $18 billion in loans from governments.

Airbus disputes those numbers, saying they overstate the amount of support embedded in the contested loans.

Both companies have cut output of four-engined A380s and 747s due to airlines' preference for smaller models and Boeing has long said the industry's behemoths have had their day. For a claim to stick at the WTO, subsidies must be found not just to exist but to have caused real harm.

"Significantly, it dismissed the vast majority of the USA claims that this support had damaged Boeing's aircraft sales".

"The Airbus case against Boeing is yet to come".

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