Airbus demands US reduces tariffs in wake of WTO findings

WTO panel finds that EU continues to provide ‘unfair‘ subsidies to Airbus, clearing the way for retaliatory tariffs from the US
Airbus A350-1000 fly-past at Paris Airshow 2019
Airbus/Master Films/Frederic Lancelot
Airbus A350-1000 fly-past at Paris Airshow 2019

Airbus has called on the US to “immediately reduce” the $7.5 billion in tariffs that the WTO authorised to the US in October by around $2 billion.

The European planemaker, which is at the centre of a trade spat between the EU and the US, made the statement in the wake of new findings by the World Trade Organisation (WTO).

A WTO panel found that the EU is still providing “unfair subsidies” to Airbus, which gives weight to the US’ case for retaliatory tariffs.

The panel assessed whether major EU countries had followed WTO’s recommendations and withdrawn illegal support for Airbus’ A350 and A380 planes.  

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In October, the WTO ruled that the US was within its rights to impose tariffs on $7.5 billion of EU imports, including Airbus jets. The WTO is due to make a decision on the EU’s retaliation rights next year, which would include levvies on Boeing aircraft.

But Airbus issued a statement earlier this week claiming that the panel’s findings show that the loans for the development of the A380 “no longer have an impact on Boeing sales”.

It said: “The US Trade Representative (USTR) now should accept the reality that loans made to Airbus in the early 2000s – for the development of a product that is no longer being sold – do not have an impact on Boeing sales.”

Airbus’ statement added that the company “would support to appeal [the WTO’s report” because of the panel’s findings that the amendments already made to the A350 loan agreements “are not sufficient to fully align the loans with market conditions”.

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In May 2018, the WTO Appellate Body clarified that the EU and Airbus have achieved compliance with respect to the vast majority of measures at issue, but considered that some adjustments were needed to the A380 and A350 loans.

Airbus says it has taken measures on both programmes relating to the respective loans of EU countries or on the market effects those loans had on Boeing.

Earlier this year, Airbus’ CEO said that a solution needed to be found as the trade war was damaging the entire aviation market.

Later, Emirates’ president Sir Tim Clark said that the spat was increasing aircraft prices and would make fare more expensive for consumers.

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