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WTO: U.S. can tax $7.5B worth of European goods over subsidies to Airbus

The U.S. complaint argued that subsidies given to Airbus resulted in sales that harmed rival Boeing.

By Clyde Hughes
WTO: U.S. can tax $7.5B worth of European goods over subsidies to Airbus
An Airbus A330neo performs on June 17 at the Paris Air Show at Le Bourget, north of Paris, France. File Photo by Eco Clement/UPI | License Photo

Oct. 2 (UPI) -- The World Trade Organization ruled Wednesday the Trump administration has legal ground to impose new tariffs on $7.5 billion worth of European exports, because of subsidies the global body considers illegal that were given to aircraft manufacturer Airbus years ago.

The U.S. government filed the complaint against the French aviation giant in 2004, under former President George W. Bush's administration, arguing unlawful subsidies from Britain, France, Germany and Spain gave Airbus an unfair advantage over rival plane maker and U.S. industry giant Boeing. The complaint estimated the resulting U.S. economic harm to be between $7 billion and $10 billion per year.

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A WTO arbitrator said in a 156-page ruling its "findings support the conclusion" the subsidies allowed Airbus to win "significant" plane sales at Boeing's competitive expense. Multiple instances, it said, caused "identifiable economic harm" to the United States.

The ruling could have an immediate impact on the trade relationship between the United States and the European Union.

U.S. Trade Representative Robert E. Lighthizer has previously promised tariffs for exported European aircraft and other products, like wine and cheese, if the WTO ruled in the United States' favor.

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EU members have already promised to retaliate with counter-tariffs if the U.S. government goes through with Airbus-related taxes.

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