EU Demands $12 Billion in Penalties for U.S. Subsidies to Boeing

In a long-running dispute over subsidies paid to aircraft makers, the European Union (EU) today sought permission from the World Trade Organization (WTO) to impose $12 billion in tariffs on U.S. made goods and services imported into Europe. The disagreement centers on subsidies paid by the EU and the U.S. to airplane makers — in Europe, the European Aeronautic Defense & Space Co. (EADS), makers of the Airbus planes, and in the United States, Boeing Co. (NYSE: BA).

In March the WTO ruled that the U.S. had indeed may $3 to $4 billion in illegal subsidy payments to Boeing, far less than the $19 billion in payments listed in the EU’s original charge. According to the Office of the U.S. Trade Representative, the EU was found to have provided $18 in payments to EADS.

The action requested today by the EU alleges that the U.S. has not stopped providing the illegal subsidies to Boeing and seeks to penalize the U.S. by imposing tariffs on other U.S. exports.

Paul Ausick