Airbus moves to stop dispute, end U.S. tariffs

The U.S. tariffs covered not only Airbus planes but also a range of typical European exports, including gouda cheese, French wine and single-malt whiskey.

European plane-maker Airbus says it is taking the last step to end 16 years of litigation with the United States at the World Trade Organization over subsidies.

The manufacturer said it will end a system of financial support from France and Spain that the trade organization had deemed illegal and unfair to rival Boeing. The Trump administration used the case as justification to impose tariffs on $7.5 billion worth of European exports.

The U.S. tariffs covered not only Airbus planes but also a range of typical European exports, including gouda cheese, French wine and single-malt whiskey.

“After 16 years of litigation at the World Trade Organization, this is the final step to stop the long-standing dispute and removes any justification for U.S. tariffs,” the company said.

Shares of Toulouse, Francebased Airbus fell 2.07% in Paris and are down 51% this year.

The Airbus case centers on so-called launch aid from European countries that trade organization judges ruled had impeded sales for aircraft from Boeing in the twin-aisle and very large aircraft markets.

Airbus said Friday that it had agreed to make changes to this system of financial support. The plane-maker said that risk-assessment benchmarks and interest rates will be amended in line with what the organization deems appropriate. After that, Airbus says it will be compliant with all the organization’s rulings.

“Airbus has left no stone unturned to find a way towards a solution,” Airbus Chief Executive Officer Guillaume Faury said in a statement. “We have fully complied with all the WTO requirements.”

The changes by themselves will not automatically end the dispute or force the U.S. to scrap its tariffs, since the EU must now ask the trade organization to determine whether they go far enough, something that could take a year or more. Still, the EU jumped on the Airbus announcement to demand that the U.S. act now.

“We insist that the U.S. lifts these unjustified tariffs immediately,” EU Trade Commissioner Phil Hogan said in a statement.

He also repeated a longstanding plea to the U.S. to negotiate a general agreement on aid for plane-makers, while reiterating a threat to hit American goods with tariffs once the trade organization sets a limit on damages for the claim against Boeing in the coming months.

The Airbus move comes with the U.S. weighing new tariffs on European exports like olives, beer, gin and trucks and increased duties on products including aircraft. A monthlong public comment period ends Sunday.

In October, the trade organization determined the EU’s subsidies for the production of two Airbus widebody models, the A350 and the now-discontinued A380 super-jumbo, harmed sales at Chicago-based Boeing.

That resulted in the largest award in the organization’s history — nearly twice as large as the previous record of $4.04 billion set in 2002. Information for this article was contributed by staff members of The Associated Press and by Siddharth Philip and Jonathan Stearns of Bloomberg News.