WTO rules European Union failed to halt all Airbus subsidies

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WTO rules European Union failed to halt all Airbus subsidies

The World Trade Organization ruled on Tuesday the European Union had ignored requests to halt all subsidies to plane maker Airbus, prompting the United States to threaten sanctions against European products unless the EU stops "harming USA interests".

The U.S. says it would slap tariffs on European goods unless the EU stopped "harming U.S. interests", but the European Commission says the U.S. had lost most of its claims and that much of the aid faulted by the WTO had expired in 2011. The WTO will determine the size and scope of the tariffs based on the harm suffered by the U.S. It is anticipated that USA tariffs will be authorized up to the amount of annual harm this market-distorting tactic is causing.

Boeing predicted such tariffs could reach billions of dollars a year starting as early as 2019.

But the WTO still has to make a final ruling on separate allegations from the European Union that Boeing was provided illegal subsidies from the US government.

Boeing said it anticipated that United States tariffs up to the amount of harm from the subsidies could be scheduled as early as 2019.

The WTO has yet to rule on a related case charging that tax breaks by the U.S. state of Washington - where most Boeing manufacturing facilities are located - amounted to an illegal subsidy, the release said.

The authorized tariffs are likely to total billions in duties per year, unless and until Airbus addresses the illegal subsidies it received from European governments for its most recently launched airplanes. "The commercial success of products and services should be driven by their merits and not by market-distorting actions", said Boeing Chief Executive Officer Dennis Muilenburg.

The trade court in September ruled in Boeing's favor in another case brought by the European Union, overturning an earlier finding that $8.7 billion in state aid to Boeing for making the 777X in Washington was a prohibited subsidy.

Just one finding against the United States now remains before the WTO, which concerns a Washington state tax measure. Full details to come.

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