America is preparing to hit $7.5bn-worth of European imports with tariffs

MOST MUSEUM exhibits are beautiful—or at least old. But an exhibition in 2015 at the World Trade Organisation (WTO) included 60 cardboard boxes of documents. The point was to give a sense of the scale of two of the body’s longest and largest legal disputes, over American and European subsidies for aircraft manufacturers. Now the fight is moving out of the paperwork phase. That means tariffs are coming.

On October 2nd the WTO published its decision to allow the Trump administration to put tariffs on $7.5bn-worth of imports from the European Union. That is intended to match the harm done to Boeing, an American manufacturer, by the EU’s subsidies for Airbus, Boeing’s European rival. It is the largest retaliation the WTO has ever approved. Senior officials at the United States Trade Representative (USTR) called the victory “historic”.

The dispute has been long and bitter. In October 2004 America complained to the trade body about loans offered by EU governments to Airbus on easy terms. The following June the EU filed a complaint about the harm to Airbus from subsidies to Boeing, in the form of tax breaks and generous contracts with the Department of Defence. Since then there has been enough legal back-and-forth to bore the most ardent plane-spotter. The WTO ruled against both subsidisers. Each made some adjustments supposed...

via The Economist: Finance and economics Business Feeds

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