EU hits US with $4 billion in tariffs over illegal Boeing subsidies

“The US has imposed their tariffs following the WTO ruling in the Airbus case, now we have a WTO ruling also in Boeing, allowing us to impose our tariffs, and that’s what we are doing,” European Union Commission Executive Vice-President Valdis Dombrovskis said today as the EU has agreed to impose tariffs and other penalties on up to $4 billion worth of American goods.

The European Union said that the tariffs are being imposed over illegal US government support for American air space giant Boeing.

According to Dombrovskis, EU remains open for a negotiated solution. European Union’ proposal remains on the table that both sides withdraw their tariffs, but so far, the US has not agreed to withdraw their tariffs, despite several appeals.”

The announcement comes after international arbitrators last month gave the world’s biggest trade bloc the green light to target US goods over Boeing subsidies. Earlier, the WTO authorized the United States to slap penalties on EU goods worth up to $7.5 billion over EU support for Boeing’s European rival Airbus. 

In October 2019, Washington imposed a 10 percent tariff on most European-made Airbus jets and duties of 25 percent on a list of EU products, ranging from cheese and olives to whiskey. The EU last month released a preliminary list that suggests it could go after a wide range of US products including frozen fish and shellfish, dried fruit, tobacco, rum and vodka, handbags, motorcycle parts and tractors.

The transatlantic legal battle over aircraft subsidies began in 2004, when the US government accused Britain, France, Germany and Spain of providing illegal subsidies and grants to support Airbus. At the same time, the EU filed a similar complaint about US subsidies for Boeing.