WTO: EU can impose tariffs on $4 billion of USA goods

US-eU-aircraft-tariffs

Boeings’ work on defense and NASA projects raised the ire of the European Union

The European Commission said it would pull back from imposing duties if Washington withdrew its tariffs on European goods such as wine and whisky.

European officials have been pushing the United States to remove the taxes the U.S. imposed on European goods following the WTO ruling previous year.

The EU, which drew up a list of potential American targets for tariffs a year ago that included handbags and ketchup, had been awaiting a final decision from the WTO about how much of a punishment it could impose.

The WTO arbitrator did not take into consideration Washington State's repeal of the offending tax provision, limiting its review to the impact from 2012 through 2015.

Last year, the WTO authorised a record $7.5 billion in United States sanctions against European goods and services over the bloc's assistance to Airbus, also considered improper under worldwide trade regulations.

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The decision, which is final and can not be appealed, dates back to 2006 and is part of a string of long-running disputes between the two plane-making giants at the Geneva trade body.

The U.S. government said there was no legal basis for the European Union to impose tariffs since the contested tax break had been eliminated, a view echoed by Boeing which said it had already complied with WTO findings.

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

It was the biggest amount authorised to date by the WTO and was a result of European Union aid to Airbus that was deemed improper under worldwide trade regulations.

"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", Faury said.

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"We remain prepared and ready to support a negotiation process that leads to a fair settlement", he added.

While the European Commission has said it would prefer a negotiated solution, the bloc would impose tariffs that could target wine, spirits, suitcases, tractors, frozen fish and agricultural produce without one. "Rather than escalating this matter with threats to USA 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 16-year old dispute around so-called illegal state aid given to both Boeing and Airbus has been an ugly and costly battle on both sides.

Today's decision will not be welcome on either side of the Atlantic, particularly given the other tough economic factors facing U.S. businesses right now. The EU filed a second complaint over subsidies to Boeing in 2014.

The European Union imposed tariffs in 2018 on $3 billion worth of U.S. goods, including whiskey, motorcycles and denim, in response to U.S. tariffs on EU steel and aluminum put in place by the Trump administration.

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Aircraft and parts are a significant import on both sides of the Atlantic. The value of imported aircraft and parts, in the main from the Boeing Company, was estimated to be worth nearly $20 billion.

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