Boeing, Airbus both find positives in WTO subsidy ruling

Daniel Fowler
May 16, 2018

A final ruling by the World Trade Organization (WTO) that the European Union illegally helped Airbus with $22 billion in subsidies authorizes the United States to impose retaliatory tariffs to recover losses suffered by USA aircraft manufacturer Boeing, according to a press release by Boeing on Tuesday.

The decision could further ramp up tensions between the US and Europe, which have been stoked by President TrumpDonald John TrumpAvenatti defends right to release Cohen's financial info Pruitt's 24/7 security requested over fears of Trump policy backlash Senate GOP anger over McCain insult grows MORE's criticism of EU trade policies, his refusal to provide a permanent exemption for tariffs on European steel and aluminum imports and last week's decision to leave the Iran nuclear deal.

Deciding on a case first opened in 2004, the appellate body found Airbus had paid a lower interest rate on financing to develop the A350XWB than the European plane-maker would have gotten in the open market.

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On today's ruling, both manufacturers are claiming victory.

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The US accused the European Union and the four countries of providing grants, preferential loans and other illegal aid to Airbus to help it to build its entire fleet of civilian aircraft, to the... The Geneva-based WTO can't force nations or companies to drop payments that violate trade rules, but it can authorize retaliatory measures to pressure governments into complying with its rulings.

"The commercial success of products and services should be driven by their merits and not by market-distorting actions", Muilenburg said. The bloc compounded the issue with below-market loans for the planemaker's marquee A350 jetliner.

Shares of Airbus reversed earlier gains to trade down as much as 1.8 percent immediately after the ruling was published.

The U.S. government, with Boeing's full support, has complied with WTO rulings stemming from the two cases the European Union brought against the United States.

It has been predicted that the tarrifa of Boeing could reach billions of dollars a year starting as early as 2019.

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