EU Permitted to Impose Duties on U.S. Imports in Boeing Case

The World Trade Organization (WTO) has managed to finally settle the long-running Boeing subsidy dispute. It has given the green light for the European Union (EU) to raise tariffs on $4 billion worth of US imports to offset the illegal subsidies to Boeing BA.N, a US aircraft manufacturer. 

EU to Retaliate Against Illegal Subsidies to Boeing

Back in March 2019, the WTO ruled that the US had not complied with WTO rules on subsidies and had provided illegal support to US planemaker Boeing which left a detrimental impact on Airbus and the European aerospace industry and its employees. The WTO's latest ruling will allow the EU to retaliate against these actions and increase tariffs on US exports.

Valdis Dombrovskis, the EU Trade Chief, stated that “Regrettably, due to lack of progress with the US, we had no other choice but to impose these countermeasures. The EU is consequently exercising its legal rights under the WTO's recent decision.”

Interestingly, this case occurs alongside a parallel dispute between the US and the EU over illegal subsidies to Airbus. In 2019, the WTO ruled in favor of the US, allowing the country to take countermeasures against the EU after concluding that the union had failed to comply with directions to end subsidies for Airbus. The WTO stated that $22 billion had been given in state aid by EU countries to Airbus, which helped launch its A380 and A350 jets, leading to a damaging effect on its rival, Boeing. Thus, the US was allowed to take countermeasures against up to $7.5 billion worth of European exports. 

The measures the WTO imposed against the US took effect from the end of October 2019. The European Commission commented at that time that it was committed to working with the US to agree on necessary regulations regarding aircraft subsidies moving forward.

Both the rulings of the Boeing and Airbus cases have brought implications for exporters in the EU. The tension between the two trading regions has grown and was further fueled by the Trump administration. However, experts believe that with Biden now becoming the president, these tensions will finally simmer down. 

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