'EU paid Airbus $18bn in illegal subsidies'

'EU paid Airbus $18bn in illegal subsidies'

US Trade Representative Robert Lighthizer issued a statement following the WTO ruling on Tuesday. The US government filed a similar claim that year over European subsidies to Airbus.

It is expected that US tariffs will be authorized up to the amount of annual harm.

It said that tariffs could be in place as early as 2019 and were expected to be the largest-ever WTO authorisation of retaliatory tariffs. "The commercial success of products and services should be driven by their merits and not by market-distorting actions", said Dennis Muilenburg, Boeing chairman, president and CEO.

The WTO ruling did reverse parts of a 2016 decision, finding no fault in the development of the A320 and A330 jets.

But the WTO still has to make a final ruling on separate allegations from the European Union that Boeing was provided illegal subsidies from the US government.

One case has already ended in favor of the United States, and in the other, the vast majority of the allegations the European Union made against the United States and Boeing were dismissed.

The remaining claim in front of the WTO alleges illegal tax breaks for the 787 and 777.

Airbus now has a case pending at the WTO accusing the U.S. of providing illegal support for Boeing.

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The next stage of the 14-year battle will be over the size of the tariffs the USA will be allowed to impose to compensate for lost exports. Boeing claims that the EU provided the European aerospace giant more than $22 billion in illegal subsidies.

In January Canadian plane maker Bombardier escaped a punishing 300 per cent duty on sales of its C-series aircraft in the U.S. which Boeing had said received an illegal subsidy from the United Kingdom and Canada.

"Despite Boeing's rhetoric, it is clear that their position today is straightforward healthy: they have half the market and a full order book, they have clearly not been damaged", he added.

However, the amounts will depend on arbitration, expected to take around a year. Boeing has in the past shown complete disregard by ignoring the recommendations and continuing with their illegal behavior.

But the organization also overturned a previous ruling that found the subsidies were hurting sales of the single-aisle 737, Boeing's most popular plane.

A big trade ruling in the long battle between Airbus and Boeing left both sides cheering.

The size of USA tariffs to be allowed will be determined through a WTO arbitration process, and will be based on the annual harm to US and Boeing - losses that the USA had previously pegged as ranging from $7 billion to $10 billion a year.

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