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Due to years of illegal subsidies for US aircraft maker Boeing, the European Union can impose punitive tariffs on US imports amounting to nearly four billion dollars (3.4 billion euros) per year. This was determined by independent arbitrators, as reported by the World Trade Organization (WTO). The referees stayed well below the original demands.
Because Airbus had been disadvantaged for years by state aid to the competitor, the EU had initially claimed $ 12 billion in damages. In conversation with the arbitrators, the claim was still $ 8.6 billion. In a similar case, US arbitrators had already approved punitive tariffs on EU products worth $ 7.5 billion due to unauthorized subsidies for Airbus.
Donations in ketchup and game consoles
The ruling represents the preliminary line of the dispute between trading giants the United States and the EU, which has been going on for more than 15 years. An appeal is excluded. The EU has already threatened taxes on ketchup, game consoles and other products.
WTO mediators had already concluded in March 2019 that the US had failed to stop government aid to Boeing that had been criticized for years. Since then, the arbitrators have been busy determining the amount of punitive fees allowed. The grants included research funds from NASA’s space agency and tax breaks. The former US bestseller, the long-haul Boeing 787 “Dreamliner,” also received state funding.
Highest amount since the WTO was founded
About 15 years ago, the EU and the US sued each other in the WTO for aid to Airbus and Boeing. As early as May 2018, the arbitrators in the Airbus case discovered that Brussels had not stopped the reported subsidies. In October 2019, they passed punitive tariffs on goods worth $ 7.5 billion a year in the United States. That was the highest amount approved since the WTO was founded in 1995.
The United States implemented the ruling immediately: it made it more expensive to import cheese, butter and wine and many other products from Europe, as well as components for the aviation industry. Punitive tariffs range from 15 to 25 percent. They mainly punished the countries that paid the Airbus subsidies: Germany, France, Spain and the United Kingdom.
The EU last offered the United States in July to negotiate a settlement of the disputes and an end to all punitive tariffs. Washington did not initially respond.
