Economy

Boeing Jets Subject to EU Tariffs Approved by WTO

Boeing Jets Subject to EU Tariffs Approved by WTO”

The European Union on Tuesday (October 13) won the right to impose retaliatory tariffs on US goods.

The ruling, which could inflame Trump administration criticism of the Geneva-based trade body, amounts to one of the largest penalties handed down by the WTO.

The ruling raises the possibility that, just as Boeing scrambles to ramp up 737 MAX jet deliveries early next year, the EU could slap a 15% tariff on MAXs delivered to Ryanair and other European airlines.

Combined, the two cases represent the world's largest-ever corporate trade dispute.

Although officials from the USA and the EU have each voiced their desire to reach a negotiated settlement, European Union trade commissioner Phil Hogan warned in July of an escalation of the trade war between the EU and the US after he said Washington had rejected overtures to settle the dispute.

The United States had argued that the illegal support merited no more than $412 million in penalties, while the European bloc had countered that they deserved almost $8.6 billion. It further said that the illegal subsidies to Boeing had cost Airbus $4 billion in lost sales and market share every year.

"I have made it clear that my strong preference is for a negotiated settlement with the U.S, avoiding harmful rounds of measures and countermeasures", Commission Executive Vice President Valdis Dombrovskis said in a statement.

More news: Court-packing: PolitiFact notes the definition is clear

The state of Washington has since moved to repeal tax breaks that benefited Boeing, while Airbus has announced it will increase loan repayments for the A350 plane to France and Spain in bids to settle the matter.

In the latest development in the 16-year saga between Washington and Brussels over support for their aircraft manufacturers, the European Union is expected to get the green light to impose around $4.0 billion in tariffs on United States goods and services, according to the Bloomberg news agency.

Last year, the WTO cleared the United States to impose tariffs on $7.5bn in European Union items. There was no immediate comment from the US Trade Representative.

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.

Both sides filed complaints at the WTO on October 6, 2004, though the parallel cases have followed different timetables. "This would generate positive momentum both economically and politically, and help us to find common ground in other key areas".

"Rather than escalating this matter with threats to US businesses and their European customers, Airbus and the EU should be focusing their energies on good-faith efforts to resolve this long-running dispute", Boeing said.

The spirits industry on both sides of Atlantic urged restraint and an end to tariffs.



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