Boeing: WTO Ruling Could Lead To Biggest Retaliatory Tariffs Ever

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A final ruling by the World Trade Organization (WTO) that the European Union illegally helped Airbus with $22 billion in subsidies authorizes the United States to impose retaliatory tariffs to recover losses suffered by U.S. aircraft manufacturer Boeing, according to a press release by Boeing on Tuesday.

The World Trade Organization final ruling Tuesday paves the way for U.S. President Donald Trump to impose retaliatory sanctions.

"Today's final ruling sends a clear message: disregard for the rules and illegal subsidies is not tolerated. The commercial success of products and services should be driven by their merits and not by market-distorting actions", said Boeing Chief Executive Officer Dennis Muilenburg.

"This landmark ruling by the WTO Appellate Body is the final decision in this case, which was initiated in 2006", the release said.

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. The bloc compounded the issue with below-market loans for the planemaker's marquee A350 jetliner. The WTO will determine the size and scope of the tariffs based on the harm suffered by the U.S.

BA shares closed -0.7% in today's trade, while EADSY ended -1.9%.

Mr. Enders of Airbus ratcheted up his rhetoric, accusing Boeing of relying on a "Washington state corporate welfare scheme" and insisting that the latest ruling was "only half the story - the other half coming out later this year will rule strongly on Boeing's subsidies and we'll see then where the balance lies".

At the same time, the WTO is close to finalizing a similarly drawn-out case against subsidies for Boeing, and Airbus says this could in turn spark European Union sanctions against the United States. 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.