US-EU trade dispute hots up as WTO gives EU the go-ahead on $4bn-worth of tariffs

Wed 14 Oct 2020
Posted by: Noelle McElhatton
Trade News


The World Trade Organization (WTO) has given the EU the go-ahead to impose tariffs on US products worth $4bn in retaliation against US duties put in place as part of the long-running dispute over aviation subsidies, reports the Guardian.  

US manufacturer Boeing and its European competitor Airbus have been at loggerheads since 2004 over mutual claims of unfair state aid.

Boeing has claimed that Airbus was given launch aid from several countries to develop its A350 and A380 planes, while the US giant has been accused of receiving illegal tax breaks from the state of Washington. 

Wider trade dispute 

The case has soured trade relations between the US and the EU. In October 2019, the US imposed tariffs worth $7.5bn on EU products including scotch whisky, French wine and cheese in retaliation for the subsidies to Airbus.

For its part the EU has said it would consider targeting US exports such as motorcycle parts, video games consoles, fish and wine. 

However, the latest WTO decision could yet lead to discussions to resolve the 16-year legal battle according to negotiators, reports Reuters

Valdis Dombrovskis, the European commission vice-president in charge of trade, said: “Our strong preference is for a negotiated settlement. Otherwise, we will be forced to defend our interests and respond in a proportionate way.”