The EU has been given the go-ahead to slap tariffs on $4bn (£3.1bn) of US goods in the latest development in the subsidy saga involving Boeing and Airbus.
It comes after the World Trade Organization (WTO) last year allowed Washington to tariff $7.5bn of EU goods over state support for European aeroplane manufacturer Airbus.
The trade dispute – one of the biggest in the WTO’s history – dates back 16 years.
After signing an agreement with the EU on state aid, the US accused the bloc of providing illegal funding to Airbus. It is a major competitor to US aeroplane giant Boeing.
The EU responded with its own legal challenge. After years of disputes, the WTO ruled that the US could apply tariffs to EU goods last year. The US government slapped taxes on products including French wines and Scottish whiskies.
Coronavirus delayed the WTO’s ruling on whether the EU could retaliate with tariffs of its own.
But the trade organisation today said the bloc could put tariffs on $3.99bn of US goods. This was less than the $8.6bn the EU had asked for, however.
EU says US should ‘immediately re-engage’
The EU has drawn up a list of US imports it could tax. It includes planes, wine, spirits and fish.
However, the EU said it would refrain from imposing them if the US government withdrew its tariffs on European goods.
European Commission vice president for the economy Valdis Dombrovskis said the EU would “immediately re-engage with the US in a positive and constructive manner to decide on next steps”.
“Our strong preference is for a negotiated settlement,” he said. “Otherwise, we will be forced to defend our interests and respond in a proportionate way.”
Airbus said: “It is time to find a solution now so that tariffs can be removed on both sides of the Atlantic.”
Boeing said the EU had no grounds on which to impose tariffs. It said it had already complied with WTO findings over subsidies from Washington state.
“Airbus and the EU should be focusing their energies on good-faith efforts to resolve this long-running dispute,” the company said in a statement.