WTO: EU can impose tariffs on $4 billion of US goods

Daniel Fowler
October 16, 2020

The arbitrators were tasked with setting a dollar value in sanctions such as tariffs that the European Union could impose a year after the WTO's appellate body found that Boeing had received at least $5 billion in subsidies that were prohibited under worldwide trade rules. The EU has leveled similar accusations against the U.S., saying Boeing received illegal subsidies.

Airbus CEO, Guillaume Faury, said that the European company "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".

"As we have already demonstrated, we remain prepared and ready to support a negotiation process that leads to a fair settlement".

"The arbitrator determined that the level of countermeasures "commensurate with the degree and nature of the adverse effects determined to exist" amounts to $3.99 million per annum", the WTO ruled. "An immediate restoration of duty free access for all distilled spirits is essential to returning our industry to supporting jobs on both sides of the Atlantic".

Discus said in a statement: "Instead of further escalation, we hope the USA and the European Union will come back to the negotiating table and agree to the immediate and simultaneous removal of tariffs on other distilled spirits".

Although optimists will hope it could settle a 16-year legal battle over subsidies given to their respective planemakers - Boeing and Airbus.

For its part, Boeing insisted the tax break repeal by Washington state should have removed any basis for Tuesday's ruling.

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In March, in order to bring Boeing into compliance with WTO rules, Washington state eliminated its main tax incentive for the company.

- The European Union on Tuesday won the rights to impose retaliatory tariffs on United States goods.

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".

Settlement of this long-running dispute over airplane manufacturing subsidies is mired in legal, bureaucratic and political complications. That's because the USA, unhappy with WTO rulings against its imposition of trade tariffs in other cases, has refused to appoint new judges to the body.

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 EU had sought $8.5 billion in annual tariffs while the US argued tariffs should be kept to less than $412 billion.

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