The World Trade Organization (WTO) is expected to grant the United States approval to impose tariffs on European Union (EU) goods, including aircraft and parts, worth up to $8 billion annually.
The decision could reignite what has already been a has been a fifteen year long aircraft dispute concerning rival plane makers Boeing and Airbus, in which both the U.S. and the EU have their own separate cases pending before the WTO.
“The escalating dispute is threatening to damage both parties.
“A trade war on aviation would be a lose-lose game because the supply chains are very integrated
“We buy a lot in the U.S., we sell in the U.S. and we are a U.S. player as well.” Airbus CEO Guillaume Faury states.
Arbitrators representing the Dispute Settlement Body (DSB) of the global trade watchdog met in Geneva, Switzerland, on September 30, 2019, to consider measures affecting the dispute over trade of large civil aircraft.
It is expected the WTO will back the U.S. complaint, granting it the right to impose tariffs on billions of dollars of European goods, as several media reports suggest.
The Trump administration has requested to impose tariffs of up to 100% on European exports to the U.S. with a trade value of approximately $11.2 billion a year, according to a recent report by CNBC.
Airbus’ U.S.-based operations sustainability is threatened by the proposed list of, such as the A320 manufacturing facility in Mobile, Alabama, which depends on imported components to build the aircraft.
The WTO has ruled that both Airbus and Boeing received illegal subsidies: the EU was found to have unfairly supported the development of two Airbus programs, the late A380 and the A350, while Boeing is said to have received unjustified tax breaks from the U.S. authorities.