WTO determines EU unfairly subsidised Airbus, opens way for US tariffs

The World Trade Organization has ruled today that the European Union failed to honour multiple previous rulings and illegally subsidised European aircraft-maker Airbus to the tune of over $22bn to help launch its A380 and A350 jets.

After a decade-long examination, the WTO said the EU had to put a stop to the subsidies and remedy the ongoing harm caused by them. The final ruling paves the way for the US Trade Representative to impose tariffs on European imports as a means to alleviate the harm caused.

The tariffs, which could total billions per year and be implemented as early as 2019, are expected to be the largest ever authorised by the multilateral trade body.

American rival Boeing issued a statement shortly following the ruling.

The firm’s CEO Dennis Muilenburg said: "Today's final ruling sends a clear message: disregard for the rules and illegal subsidies is not tolerated. The commercial success of products and services should be driven by their merits and not by market-distorting actions."

"Now that the WTO has issued its final ruling, it is incumbent upon all parties to fully comply as such actions will ultimately produce the best outcomes for our customers and the mutual health of our industry. We appreciate the tireless efforts of the U.S. Trade Representative over the 14 years of this investigation to strengthen the global aerospace industry by ending illegal subsidies."

But Muilenburg's remarks drew a quick retort from Airbus chief Tom Enders who said that "today’s report is really only half the story […] The other half coming out later this year will rule strongly on Boeing’s subsidies and we’ll see then where the balance lies."

"The current geopolitical climate for trade is worrying, and industry players should not fuel it with unproductive disputes that undermine fair competition world-wide," Enders added.

Indeed, another WTO case against Boeing this time for the alleged subsidies it receives from Washington was also being examined in parallel.

The long-running dispute between the two giants came on top of the existing trade tension between the EU and the US after Donald Trump threatened the trade block with tariffs on exports of its steel and aluminium to the US and more recently around Iran.

Nevertheless, Airbus said it would bring its programs in line with requirements and would comply with WTO rules.