Airbus warns of 'serious damage' to aviation industry after US wins $7.5bn sanctions battle with EU

EU and US must negotiate to avoid ‘serious damage to aviation industry’, says Airbus CEO as WTO gives Trump go-ahead to impose massive tariffs on European aircraft
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Donald Trump, Airbus, EU, Trade tariff, Trade relations, Sanctions, WTO, World Trade Organization

Airbus’ CEO has warned of ‘insecurity, disruption and serious damage' to the aerospace industry after the World Trade Organisation allowed the US to proceed with tariffs on $7.5 billion worth of European exports, including Airbus products.

The WTO’s ruling is the latest in US president Trump’s trade dispute with the EU, which will likely see the EU retaliate with its own tariffs on American exports, including Boeing aircraft and parts.

Airbus has ‘unfairly’ benefited from aid loans and subsidies on the A380 and A350WXB, according to the WTO. Boeing and the US believe the manufacturer gained an unfair advantage in the market.

Toulouse-based manufacturer Airbus warned of a ‘severe impact’ on US and EU industries and higher costs on the acquisition of new aircraft for both US and EU airlines.

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But it believes serious economic damage to the industry and the wider economy is ‘avoidable’, if the EU and US can negotiate.

CEO Guillaume Faury said: “Airbus will continue working with its US partners, customers and suppliers, to address all potential consequences of such tariffs that would be a barrier against free trade and would have a negative impact on not only the US airlines but also US jobs, suppliers, and air travellers.

“Airbus is therefore hopeful that the US and the EU will agree to find a negotiated solution before creating serious damage to the aviation industry as well as to trade relations and the global economy.”

In the coming months, the WTO will determine the amount of tariff countermeasures the EU can impose on US products – including imported Boeing aircraft – in Airbus’ parallel counter case regarding alleged illegal subsidies to Boeing.

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Airbus believes that the EU has grounds to claim countermeasure tariffs on US products because of the WTO’s findings that the US failed to address illegal subsidies causing harm to Airbus.

Currently, 40% of Airbus’ aircraft-related procurement comes from US aerospace suppliers.

The company issued a statement that said: “The only way to prevent the negative effects of these tariff would be for the US and EU to find a resolution to this long-running dispute through a negotiated settlement.

“Airbus continues to encourage the US Administration and the European Commission to find a settlement to this dispute, and thereby preserve the free, fair competition and open trade that have proven beneficial to the public and essential for a successful and growing global aviation industry.”

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