WTO Rules $22Bln EU Subsidies to Airbus Illegal, Authorizes US Retaliation

Airbus A380

Airbus A380

The United States has threatened the European Union with billions of dollars of import duties if it fails to honour a World Trade Organisation ruling to stop providing illegal subsidies to Airbus.

The decision could further ramp up tensions between the USA and Europe, which have been stoked by President TrumpDonald John TrumpAvenatti defends right to release Cohen's financial info Pruitt's 24/7 security requested over fears of Trump policy backlash Senate GOP anger over McCain insult grows MORE's criticism of EU trade policies, his refusal to provide a permanent exemption for tariffs on European steel and aluminum imports and last week's decision to leave the Iran nuclear deal.

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"Today's final ruling sends a clear message: disregard for the rules and illegal subsidies is not tolerated".

The two archrivals have been locked in a back-and-forth trade dispute over subsidies since 2006.

"The commercial success of products and services should be driven by their merits and not by market-distorting actions", Muilenburg said.

The WTO panel found that Airbus hasn't been in compliance with some of the trade body's rules since 2011.

The decision Tuesday affirmed a ruling that European Union member states have failed to adequately remedy market-distorting aid for the launch of Airbus's A380 superjumbo, infrastructure support and equity investments that unfairly benefited the planemaker.

Airbus said in a statement released after the WTO ruling that it would take steps to ensure the aid complies with the decision, and predicted any eventual sanctions would be minor.

The shares of Airbus had fallen shortly after the WTO issued its findings and were poised to close down around 0.86 percent. Boeing fell less than 1 percent to $342.10 at 11:43 a.m.in NY. It is under appeal and should be decided later this year or in early 2019. The decision means the US can now ask an arbitrator to determine how much it can retaliate against the European bloc for failing to comply - raising a new question about how much Washington may recover from the EU through retaliatory tariffs.

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