$4 Billion In Tariffs Of US-EU Exports Approved By WTO

Cornelia Mascio
Ottobre 16, 2020

The news relied on three anonymous EU officials familiar with the thinking while confirming that the award is lower than the $7.5 billion judgment granted to the US a year ago in a parallel dispute against Boeing's European rival, Airbus.

Consuming thousands of pages of testimony and an estimated 100 million dollars in costs since 2004, the aircraft spat has tested the resolve of the WTO, which is busy selecting a new leader.

The EU had argued that tax breaks for Boeing from Washington state, which was once headquartered in Seattle and has major manufacturing operations in the state, unfairly harmed Airbus jets in the large single-aisle civil aircraft market - namely the A320neo and A320ceo aircraft.

Boeing shares fell two per cent. The ruling against the European Union stemmed from government support of the development of the A380 and A350, while the ruling on Boeing centered on tax breaks from the state of Washington introduced more than a decade and a half ago and renewed in 2013 to attract 777X wing production to the state. But the two sides were left sparring over how genuinely they were trying to end decades of aerospace support.

The European Commission said it would pull back from imposing tariffs if Washington withdrew tariffs on European goods such as wine and whisky. "It is time to find a solution now so that tariffs can be removed on both sides of the Atlantic".

EU flags flutter outside the European Commission headquarters in Brussels, Belgium, August 21, 2020.

"Because Washington State repealed that tax break earlier this year, the European Union has no valid basis to retaliate against any US products", he said.

The $4bn tariff window means European airlines that import Boeing jets could have to pay tariffs expected to match United States border taxes on Europe-built Airbus jets, now 15pc.

The ruling raises the possibility that, just as Boeing scrambles to ramp up 737 MAX jet deliveries early next year, the EU could slap a 15% tariff on MAXs delivered to Ryanair and other European airlines.

Although officials from the USA and the EU have each voiced their desire to reach a negotiated settlement, European Union trade commissioner Phil Hogan warned in July of an escalation of the trade war between the EU and the US after he said Washington had rejected overtures to settle the dispute.

It's unlikely the European Commission will impose the authorized tariffs before the USA presidential election.

The EU had sought $8.5 billion in annual tariffs while the USA argued tariffs should be kept to less than $412 billion.

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