A view of Boeing's manufacturing facility in El Segundo, Calif. The World Trade Organization ruled Tuesday the European Union could place tariffs on U.S. goods because of illegal subsidies to Boeing. Photo by Ken Wolter/Shutterstock
Oct. 13 (UPI) -- The World Trade Organization ruled Tuesday that the European Union can to hit $4 billion worth of U.S. goods with tariffs in retaliation for outlawed subsides given to Boeing.
The ruling is the latest in a dispute that has been ongoing since 2004 between Boeing and its European rival Airbus. The WTO's decision was slowed by the coronavirus pandemic.
The body said last year that the United States had given Boeing illegal subsidies, suggesting tax breaks the domestic airplane maker received would amount to roughly $6 billion from 2006 to 2040. It also allowed the Trump administration to place tariffs on goods in Europe in response to subsidies given to Airbus.
Boeing had originally accused Airbus of receiving illegal aid from numerous governments to create and build the A350 twin-aisle plane and the related A380 superjumbo aircraft.
"The arbitrator concluded that the European Union may request authorization from the (WTO) to take countermeasures with respect to the United States," the ruling stated.
Before the tariffs can go into effect, the EU must first request authorization from the WTO. An Oct. 26 meeting is the earliest opportunity to do so.
U.S. Trade Representative Robert Lighthizer said the tax breaks cited by the WTO are no longer in effect, making a decision based on them null and void.
"Because Washington state repealed that tax break earlier this year, the EU has no valid basis to retaliate against any U.S. products," Lighthizer said. "Any imposition of tariffs based on a measure that has been eliminated is plainly contrary to WTO principles and will force a U.S. response."
Airbus Chief Executive Guillaume Faury appeared to offer an olive branch, suggesting that differences between it and Boeing and the wider dispute can be hammered out through talks.
"Airbus 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," Faury said. "As we have already demonstrated, we remain prepared and ready to support a negotiation process that leads to a fair settlement."