Business

Europe Can Impose Tariffs on U.S. in Long-Running Aircraft Battle

“Airbus did not start this W.T.O. 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,” Guillaume Faury, the company’s chief executive, said in a statement. “It is time to find a solution now so that tariffs can be removed on both sides of the Atlantic.”

Boeing said it was “disappointed” that Airbus and the E.U. had pursued the tariffs even after the tax break’s repeal, but said the company hoped that both would focus “on good-faith efforts to resolve this long-running dispute.” The E.U. had asked the W.T.O. to authorize more than $8.5 billion in annual tariffs, while the U.S. said they should not exceed $412 million.

In a statement, Robert E. Lighthizer, the United States Trade Representative, said the European Union had no valid basis to impose tariffs since Washington had already repealed its tax break, and that the United States would seek more negotiations with Europe.

“Any imposition of tariffs based on a measure that has been eliminated is plainly contrary to W.T.O. principles and will force a U.S. response,” he said. “The United States is determined to find a resolution to this dispute that addresses the massive subsidies European governments have provided to Airbus and the harm to U.S. aerospace workers and businesses.”

Ole Moehr, an associate director at the Atlantic Council’s GeoEconomics Center, said that, in the short run, there were likely to be more barriers to trade than before, but that the ruling may ultimately “open the door for a trans-Atlantic trade détente.”

“Both sides are waiting until the election is settled to re-engage and depending on the outcome we could see a ratcheting up of tensions before any potential deepening of trade ties,” Mr. Moehr said. “The Airbus-Boeing dispute is one of the keys to the entire trade relationship and today’s decision, combined with the recession triggered by the pandemic, may change the calculus over the long-term.”

The ruling brings to a close a dispute that formally began in 2004. At the time, the United States and Boeing accused several European nations of violating trade agreements by providing Airbus with below-market loans. That “launch aid” helped Airbus to develop and produce several types of aircraft, allowing it to gain equal footing with Boeing in the global airplane market, despite having less than 25 percent of the market in 1990, they argued.

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