The United States Trade Representative is continuing to take an aggressive line on the matter of subsidies to aircraft manufacturers, insisting in a presentation to the World Trade Organization appellate panel that the U.S. has addressed past findings of subsidies to Boeing Co. and maintaining that there is “no valid basis” for the European Union to penalize imported U.S. goods.
Specifically, the USTR pointed to a tax code detail repealed recently by the Washington State legislature, which had saved hundreds of millions in corporate income tax for Boeing over the 16 years it had been in effect.
“With Washington State’s repeal of this relatively minor tax reduction, the United States has fully implemented the WTO’s recommendation, ending this dispute,” stated U.S. Trade Representative Robert Lighthizer. “This step ensures that there is no valid basis for the EU to retaliate against any U.S. goods.”
The WTO is reviewing a European Union request seeking about $10 billion annually in retaliatory tariffs, based on an earlier ruling that found that U.S. government bodies (federal and state) had unlawfully subsidized Boeing's aircraft manufacturing. Reportedly, the EU has drawn a list of products worth $20 billion that it would penalized should the WTO rule in its favor in the parallel case.
A ruling on the EU's request for countervailing penalties is expected from the WTO in June.
Last October, USTR successfully argued that ruling authorized the U.S. to impose import tariffs totaling $7.5 billion on products imported from the E.U., France, Germany, Spain, and the U.K. Since March, the U.S. has been imposing a 15% penalty on Airbus jets produced in Europe.
It is believed that the U.S. hard line is part of an effort to use the import penalties and the WTO rulings to negotiate a new settlement with the EU on the issue of aircraft subsidies.