Airbus loses long-running trade dispute paving way for massive United States tariffs

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

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

(Boeing) Tuesday called as "a landmark decision" a ruling by the World Trade Organization (WTO) determining that the European Union (EU) has provided billions of US dollars in subsidies to European aircraft maker Airbus.

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

The tariffs could be scheduled as early as 2019 and would likely be the largest-ever WTO authorization of retaliatory tariffs, Boeing said.

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

Later this year, a separate WTO compliance panel is expected to deliver its decision as to whether the US complied with the terms of a 2012 ruling against illegal USA tax subsidies that gave Boeing an unfair advantage.

"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.

Former Sen. Harry Reid undergoes cancer surgery
Reid, a one-time amateur boxer and Capitol Police officer from Searchlight, Nevada, served five terms in the Senate, beginning in 1987.

Malmstrom added: "Also, we look forward to the upcoming ruling by the appellate body on USA compliance with the WTO findings of the massive and persistent government support to Boeing".

On today's ruling, both manufacturers are claiming victory. "The commercial success of products and services should be driven by their merits and not by market-distorting actions", said Boeing head Dennis Muilenburg. It is under appeal and should be decided within the next year.

The WTO decision on the latest in a string of tussles between Europe's Airbus and U.S. rival Boeing comes as the Trump administration has exerted intense pressure on the Geneva-based organisation over what the president alleges is its "unfair" treatment of the United States.

Boeing shares were down 0.7% at 342.22 on the stock market today. We likewise expect Boeing to take note when it comes to its compliance obligations.

The European Commission argued that the WTO decision rejected most USA claims and was its victory. The trade body also upheld an earlier finding that the European Union aid had no adverse affect on the market for single-aisle jet sales, the largest source of profit for Boeing and Airbus. "It shatters Boeing's claim it perpetuated for years that their WTO case undermines European industrial-government partnership". Without that, the additional loan repayment penalties, potential tariffs and public perception scorecard will put the European company at a significant disadvantage in its stated goal of dethroning the American company as the world's top aerospace company.

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