'EU paid Airbus $18bn in illegal subsidies'

'EU paid Airbus $18bn in illegal subsidies'

The WTP decision affirmed a ruling that France, Germany, Spain and the United Kingdom have failed to adequately remedy market-distorting aid for the launch of Airbus's A380 superjumbo, infrastructure support and equity investments that unfairly benefited the plane-maker.

Boeing shares were down 0.7% at 342.22 on the stock market today. "Significantly, it dismissed the vast majority of the USA claims that this support had damaged Boeing's aircraft sales".

The US Trade Representative said the ruling opens the way for placing tariffs on European Union goods unless it stops "harming USA interests".

The WTO's findings mark a stepping up of trade tensions between the USA and European Union, which are already wrangling over whether U.S. tariffs on aluminium and steel will apply to European products. "It shatters Boeing's claim it perpetuated for years that their WTO case undermines European industrial-government partnership". "That ends today", he said.

Boeing said it anticipated that United States tariffs up to the amount of harm from the subsidies could be scheduled as early as 2019. It said it would comply swiftly on the rest.

Airbus chief executive Tom Enders said the report was "really only half the story..."

In 2004, the United States lodged its original complaint with the WTO, claiming support of Airbus by France, Germany, Spain and the United Kingdom for the development of civilian airliners was unfair because it hurt USA -based Boeing's sales and market share.

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The WTO case has yielded 5,000 pages of filings and cost tens of millions of dollars.

The authorized tariffs are likely to total billions in duties per year, unless and until Airbus addresses the illegal subsidies it received from European governments for its most recently launched airplanes.

Airbus disputes those numbers, saying they overstate the amount of support embedded in the contested loans.

"Boeing is now at more than 90% failed claims". Boeing has estimated that it suffered commercial damages worth between US$7 billion and US$10 billion as a result.

Both companies have cut output of four-engined A380s and 747s due to airlines' preference for smaller models and Boeing has long said the industry's behemoths have had their day. It is anticipated that USA tariffs will be authorized up to the amount of annual harm the subsidies are determined to cause.

"The result is simple: Airbus pays back its loans, Boeing pays back nothing and continues to exploit the generosity of the United States taxpayer".

But U.S. sources say the A380 aid meant Airbus was able to gamble on building the world's largest jetliner without facing the financial consequences of market failure, bolstering its balance sheet in a way that disadvantages Boeing to this day.

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