In the latest development in the ongoing feud between the European Union and the United States, the World Trade Organization (WTO) just announced that it has rejected the EU's bid to halt the US' tariffs on its goods. In a compliance report published on Monday, the WTO stated that it has rejected the EU's claims that it is no longer providing subsidies to Airbus.
Shortly after the EU submitted its bid to halt all enforced tariffs against its exports, the United States had responded by saying that it could very well increase its retaliatory tariffs to include a much wider range of products.
The WTO mentioned in its report that its investigation has found that Airbus A380 and A350 jetliners in active service are still receiving subsidies from the EU's previously granted government loans. For this reason, the Geneva-based trade regulator had decided not to grant the EU's request for it to force the US to halt its retaliatory tariffs.
According to its findings, the WTO stated that Airbus' decision to stop producing its A380 jets did not mean that it wasn't doing any more damage to Boeing's business. The regulator explained that as long as the jets are still being produced and delivered, they continue to cause market-share damage to competitors overseas.
The regulator also strengthened its previous findings against Airbus' subsidized A350 jets, stating that it had caused substantial market-share damage to Boeing in the highly competitive twin-engine long haul aircraft market.
US Trade Representative Robert Lighthizer mentioned in a statement this week that the WTO's decision only cements the US' claims that the EU continues to provide subsidies to Airbus, greatly damaging the ability of US aerospace companies from competing in the region. The official stated that the US' strong action is still valid and a requirement to put a stop to such "market-distorting" activities.
The WTO's decision deals a big blow to the EU, which had been accused of providing illegal aircraft subsidies to Europe-based aircraft manufacturer Airbus. After an investigation into the matter was concluded in October, the WTO gave the United States the green light to impose retaliatory tariffs against the EU.
The US' retaliatory tariffs were placed on more than $7.5 billion worth of EU imports ranging from Airbus' jets to cheese, whiskey, and olives from EU countries such as France, Italy, and Germany.
Officials from both sides have expressed interest in coming up with a mutual settlement to end the US' tariffs. However, no concrete negotiations have yet taken place as each side has accused one another of not taking the prospect of a settlement seriously.
