According to CNBC article released on Feb. 14, 2020, the ongoing disputes over subsidies has made the U.S to take another step to increase the tariffs on European-built aircraft from previously imposed 10% to 15% by the U.S Government.
In a statement released late on Friday, USTR said it would make minor modifications to 25% tariffs imposed on cheese, wine and other non-aircraft products from the EU, including dropping prune juice from the list. It did not raise the tariff rates on those product, as it had suggested it might do in October.
EU Has No Legal Basis to Impose Aircraft Tariffs; WTO Award Relates Only to Now-Repealed Tax Break, Rejects EU Request on Other Measures
Background
After many years of seeking unsuccessfully to convince the EU and four of its member States (France, Germany, Spain, and the United Kingdom) to cease their subsidization of Airbus, in 2004 the United States brought a WTO challenge to EU subsidies. The EU responded by challenging what it claimed were subsidies to Boeing by the United States.
Two separate WTO panels addressed the claims brought by the United States and the EU, respectively. The two processes resulted in two very different sets of WTO findings and subsequent actions.
The U.S. Claims Against the EU
Nearly ten years ago, the WTO found that the EU provided Airbus $17 billion in subsidized financing and that European “launch aid” subsidies for every Airbus aircraft to that point breached WTO rules, causing Boeing to lose sales of more than 300 aircraft and to lose market share throughout the world.
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The EU Claims Against the United States
The EU’s original 2004 dispute alleged that the United States provided unlawful subsidies to Boeing. The WTO found that the United States provided Boeing with relatively small subsidies in research and development funding and tax benefits, with far more limited market effects than the EU’s subsidies to Airbus.
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