WTO: "US Boeing Support Violates Rules" ... Allows Large-Scale Tariff Imposition

Part of Airline Subsidy Payment Dispute
EU Prioritizes Negotiation Over Immediate Retaliation

[Image source=AP Yonhap News]

[Asia Economy New York=Correspondent Baek Jong-min] The World Trade Organization (WTO) has authorized the imposition of tariffs on U.S. products in connection with subsidies provided to aircraft manufacturer Boeing. However, the European side is prioritizing an agreement with the United States, so it is unlikely that measures such as early tariff imposition will be taken.

According to the Wall Street Journal, on the 13th (local time), the WTO ruled that U.S. support for Boeing violated international trade regulations and determined that the European Union (EU) could impose retaliatory tariffs on approximately $4 billion worth of U.S. products.

As a result of this decision, the EU can impose tariffs not only on U.S.-made aircraft but also on tractors, sweet potatoes, peanuts, frozen orange juice, tobacco, ketchup, and Pacific salmon.

Last year, the WTO ruled that the U.S. could impose retaliatory tariffs on $7.5 billion worth of European products because Airbus received subsidies from European authorities. In response, the U.S. imposed a 25% tariff on European wine, cheese, olive oil, and raised tariffs on Airbus from 10% to 15% last March.

Despite the WTO announcement, European authorities remain cautious about immediately imposing retaliatory tariffs. Valdis Dombrovskis, EU Vice President and Commissioner for Trade, stated on Twitter, "We strongly want an agreement through negotiations." He warned that if negotiations fail, proportional responses against U.S. measures would be taken.

Airbus also expressed support for any measures taken by the EU. Guillaume Faury, CEO of Airbus, said, "We are ready to support a negotiation process leading to a fair agreement," and added, "It is time to find a solution that can remove tariffs on both the European and U.S. sides."

The U.S. has warned of additional retaliation if Europe imposes retaliatory tariffs. U.S. Trade Representative Robert Lighthizer stated, "Since subsidies to Boeing have already been eliminated, the EU has no legal grounds to impose tariffs." He warned that if the EU imposes retaliatory tariffs, the U.S. would consider further retaliation.

AFP reported that this ruling could open the door for negotiations between the U.S. and the EU. It explained that tariff imposition would not be mutually beneficial as the aviation industry is facing a crisis due to COVID-19.

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