The World Trade Organization (WTO) will authorize the US to levy punitive tariffs on European imports because EU governments illegally subsidized Airbus to manufacture large commercial aircraft.
The WTO will also allow the EU to collect tariffs on US goods because of illegal subsidies provided by the US government to Boeing.
Vertical Research Partners analysts say, “There is no winner. Punitive tariffs from both the U.S. and Europe on the aerospace industry would damage both sides, but Boeing arguably has the most to lose.”
Doug Harned, an analyst at Sanford C. Bernstein, says “We believe imposition of these tariffs would be a disaster for all involved. Statements from Airbus and the EU make it clear that Europe would retaliate. Without a near-term resolution, tariffs on both sides would chill production at Boeing and Airbus, as each has roughly 1,000 airplanes in backlog to the other’s region.”