WTO rules EU can impose tariffs on US products
Published: 11:38 AM, 16 October 2020
The World Trade Organization (WTO) has ruled that the European Union (EU) can impose tariffs on US products worth $4bn in retaliation for subsidies given to Boeing.
The ruling by the WTO, delayed for Covid-19 pandemic, could increase trade tensions shortly before the US presidential election on November 3, although it could also set the stage for tariff negotiations between the EU and the US, which has already imposed tariffs on European products in parallel action against Airbus.
“Our strong preference is for a negotiated settlement. Otherwise, we will be forced to defend our interests and respond in a proportionate way,” said Valdis Dombrovskis, the EU’s vice-president in charge of trade.
The WTO had ruled in April 2019 that the US subsidies to Boeing were illegal, but had not said how big the gains were. However, between 2006 and 2040, Boeing was expected to benefit from $6bn in tax breaks, the WTO said.
Airbus and Boeing have been in the tit-for-tat trade dispute since 2004 when the US aerospace champion accused its European rival of receiving illegal launch aid from multiple governments for the development of the A350 twin-aisle plane and its larger cousin, the A380 superjumbo.
Boeing, meanwhile, received tax breaks from the state of Washington. The WTO has ruled that the subsidies to both Airbus and Boeing were illegal, however, the drawn-out dispute has outlasted several chief executives for both companies.
The EU last year said it would consider imposing tariffs targeting US exports ranging from motorcycle parts to videogames consoles to fish and wine, as well as aeroplanes.
Source: The Guardian