The World Trade Organization (WTO) on Tuesday ruled that the European Union (EU) failed to cease subsidies to Airbus and address market-distorting trade practices, which negatively impacted aerospace giant Boeing and U.S. workers.
While the E.U. said it ended more than $18 billion in financing to Airbus in 2011, it continued to provide subsidies to the planemaker for its A380 and A350 models. Those subsidies caused “significant lost sales” to Boeing and U.S. industry and “are a genuine and substantial cause of serious prejudice to the United States,” the WTO found. The final decision upholds an earlier ruling by the trade body.
The ruling clears a path for the Trump administration to issue retaliatory tariffs or sanctions.
In a statement issued Tuesday, Boeing said Airbus provided more than $22 billion in illegal subsidies, and until its European rival addresses those damages, “it is anticipated that U.S. tariffs will be authorized up to the amount of annual harm this market-distorting tactic is causing.”
Boeing predicted that tariffs could be scheduled as early as 2019 and said this is expected to be the largest-ever WTO authorization of retaliatory tariffs. The WTO will determine the size and scope of the tariffs based on the harm suffered by the U.S.
Later this year the WTO will issue a final ruling on a challenge from the EU that the U.S. provided billions of dollars of aid to Boeing.