A 16-YEAR FIGHT at the World Trade Organisation (WTO) between Boeing, an American planemaker, and Airbus, a European one, over illegal subsidies resembles a heavyweight boxing bout in which both sides raise their gloves to claim the round. And so it was on October 13th, when the WTO ruled that the EU can impose tariffs on $4bn-worth of American goods annually. The award is lower than last year’s decision that America is allowed to slap duties on $7.5bn in European goods. But it was much higher than the Americans once braced for. More important, both aerospace titans look knocked about.
The counterpunching at the WTO began in 2004. After Airbus first overtook it in aircraft deliveries, Boeing complained that its rival was boosted by government support eventually amounting to $22bn in repayable “launch aid”. Airbus soon parried with its own claim that Boeing had benefited from $24bn in favourable tax breaks, as well as research-and-development support from NASA and the Pentagon.
The WTO eventually determined that both firms had received illegal subsidies. America used last year’s win to slap tariffs on everything from French cheese to Scotch. Airbus now faces levies of 15%. The EU will be permitted to impose its new duties after October 27th....
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