Airbus-Boeing: the United States penalized, the European Union wants to negotiate

Airbus-319 Airbus-320 and Boeing-767 at Sheremetyevo airport

WTO Allows EU to Slap Tariffs on $4Bn in US Goods Over Boeing Spat Sputnik Marina Lisceva

Having finally won the long battled trade war with the United States, the European Union (EU) can hold off the decision to levy tariffs worth $4 billion of American goods until after the USA presidential election next month, per the Bloomberg.

Similarly, Airbus claims that because its A380 superjumbo jet is no longer being sold, the illegal government aid it received to launch that plane should no longer be an issue in its competition with Boeing.

The body said past year that the United States had given Boeing illegal subsidies, suggesting tax breaks the domestic airplane maker received would amount to roughly $6 billion from 2006 to 2040. Airbus, which also says it has obeyed WTO rulings, said global trade judges had "spoken" and that the European Union could therefore impose tariffs, while calling for an agreed solution.

The latest set of tariffs also potentially create a tricky situation for Britain, which, despite its historic support for Airbus, is in the midst of negotiating trade deals with both Brussels and Washington as it completes its exit from the EU. The WTO had justified retaliation from European Union, stating that the USA had provided illegal subsidies to Boeing through a tax cut in Washington that disadvantaged sales of Airbus commercial aircraft.

The EU still needs to ask for the authority to impose the levies and submit a list of products to be affected.

Reuters reports U.S. Trade Representative Robert Lighthizer to have said such a move would be "plainly contrary to WTO principles and will force a U.S. response".

Guillaume Faury, chief executive of the European plane-maker, said: "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".

That's in retaliation for subsidies granted to planemaker Boeing by the U.S.

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.

Both sides filed complaints at the WTO on October 6, 2004, though the parallel cases have followed different timetables. This was the highest tariff amount ever approved by the WTO.

In his statement Tuesday, Lighthizer said the U.S. "President Trump looks at protecting the domestic interests but after this, there will be no re-election for him, so he might bring trade negotiations to the table", Bhanumurthy says.

Tuesday's approval of tariffs against the U.S.is based on a March 2019 WTO decision that Washington state's business & occupation tax breaks for Boeing were illegal - the specific tax break the state Legislature eliminated in March.

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