WTO Approves Additional Tariffs on EU Aircraft

A trade battle that has spanned over a decade, the United States has been given the OK from the World Trade Organization to impose tariffs on European made aircraft. The main target is the aircraft manufacturer Airbus, the biggest competitor of the United States aircraft manufacturer Boeing. The United States has imposed a 10% rate on all aircraft imported into the United States, along with a 25% tariff on other items. The issue came from both aircraft manufactures accepting illegal subsidies worth billions of dollars. 

With the approval of the World Trade Organization, outside countries cannot retaliate against the US for its imposed tariffs. However, US-based Boeing is also under investigation, which means the EU could impose tariffs on the United States for the same issues, with approval from the World Trade Organization.

The goal of the United States is to bring the price for Airbus products up to fair value. The subsidies they received gave them an edge and allowed them to reduce the price of their products to the US market. Information about this can be found in Section 301 of the Trade act of 1974, which allows the President of the United States to impose tariffs on countries selling their product cheaper in the US, than a US-based company could. With cheaper prices, the company, and country in concern, could dominate the US market, and hurt the business of United States-based companies.

Contributor: George Ciaffone 

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