Daily Management Review

US Awarded Tariffs Right By WTO On $7.5 Billion Of EU Goods In Airbus Subsidy Case


10/02/2019




US Awarded Tariffs Right By WTO On $7.5 Billion Of EU Goods In Airbus Subsidy Case
The United States has been awarded permission to impose tariffs on $7.5 billion of European goods by the World Trade Organization (WTO) and many analysts fear that this could be the beginning of another trade spat between the tow trading partners on both sides of the Atlantic Ocean.
 
The right to levy billions against imports of European goods to the US President Donald Trump's administration was granted by the arbitrators from the WTO while arguing that the subsidies that were given to the European plane maker Airbus by the European Union’s member countries of Germany, France, Spain, and the United Kingdom were illegal.
 
The WTO said in a summary of its findings that the case that it considered at the WTO dates back to 2004 when the US first lodged complaint with the global trading arbitrator and that complaint was made in relation to for the development and production of the Airbus A350 and A380 airplanes
 
While come of the claims made the US in the case was rejected by the world trade body, it’s arbitrators found enough evidence that Airbus had "paid a lower interest rate for the A350XWB LA/MSF than would have been available to it on the market."
 
The arbitrators also concluded that the European Union had failed "to take appropriate steps to remove the adverse effects or … withdraw the subsidy," which had led to a "genuine and substantial" cause of serious prejudice to the United States' interests.
 
Significant lost sales in the twin-aisle and very large aircraft markets were suffered by the United States, added the WTO ruling.
 
The US had earlier demanded from the WTO that it be allowed to impose tariffs on all of the imports made into the country form the European Union which stands at an average of about $11.2 billion every year. A large list of European goods were made public in April by US officials which the US intends to use for selection for imposing tariffs so that it can make up the amount lost.
 
Any fresh tariffs levied by the United States would be "short-sighted and counterproductive," said the European Commissioner for Trade, Cecilia Malmstrom, in a statement in an instant reaction to the award by the WTO.
 
Subsidies had been illegally given to Airbus and Boeing by both the EU and the US respectively and businesses and people on both sides of the Atlantic would be impacted negatively by "mutual imposition of countermeasures", Malmstrom said.
 
She also added in her statement that demand for a new regime on aircraft subsidies has already been made by the EU and the block also wants to come to an agreement on a way to move forward with the US. She however said that the possibility of counter tariffs yo us tariffs still remains with the EU. 
 
"If the U.S. decides to impose WTO authorized countermeasures, it will be pushing the EU into a situation where we will have no other option than do the same," she said in the statement.
 
(Source:www.wsj.com)






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