EU lists goods, including airplanes, subject to tariff in WTO trade war

April 22, 2019, © Leeham News: The European Union late last week released its list of US goods, including non-military airplanes (read: Boeing airliners) that will be subject to tariffs if the US proceeds to levy tariffs on $11bn in goods.

The EU upped the ante, valuing its list at up to $20bn.

The EU’s list is here. The US list is here.


The tit-for-tat goes to the 15 year international trade dispute between the US (Boeing) and Europe (Airbus).

The World Trade Organization ruled that neither side has fully cured illegal subsidies and tax breaks. The amounts are subject to further review by the WTO.

Airbus claims “at least” $15bn in harm; Boeing claims $11bn in harm.

Airbus in the past, and continues to do so now, urge a negotiated settlement. Boeing and the US Trade Representative reject these entrees.

Before the tariffs may be implemented, the WTO must decide the amount of “harm” each side suffered and authorize the tariffs.

35 Comments on “EU lists goods, including airplanes, subject to tariff in WTO trade war

  1. Regarding: “The EU upped the ante, valuing its list at up to $20bn.”

    20 Billion??? According the excerpt below from the 3-28-19 Seattle Times article at the link after the excerpt, the WTO has ruled that the only Boeing subsidy that has not been remedied, is a 100 million a year tax break from the state of Washington. Thus, the maximum amount of retaliatory tariffs that the WTO could authorize would be the cumulative benefit to Boeing from this tax break, which according to the article was about 900 million USD as of the date of the article.

    “The decision by the WTO’s appellate body considered whether the United States had complied with a 2012 ruling that found Boeing received at least $5 billion in subsidies banned under international trade rules.

    But the ruling was limited. Except for the relatively small Washington state tax program — which the U.S. says was worth just $100 million a year — Thursday’s decision found no grounds upon which the European bloc could seek damages from an arbitrator.”

    • 100m a year, 900M total, on 20 billion of goods that is a 4.5% base retaliatory tarriff, add the harm punitive compensation and you are easily crank it up as high as you want. If you illegally reduced your plane prices by 4.5% the financial harm cause is far far higher. What is the total lifecycle value of those plane sales that were unfairly won?

      • Hello Mark from Toronto,

        Regarding: “add the harm punitive compensation” and “What is the total lifecycle value of those plane sales that were unfairly won?”

        According to the WTO website (see excerpt and link below) a retaliatory response may not exceed the actual harm caused, thus punitive damages are not allowed, and any retaliatory response authorized by the WTO will be prospective rather than retroactive, i.e.: cover only damages that occur after the date retaliation was authorized, not damages over the total lifecycle of a program.

        “The level of suspension of obligations authorized by the DSB must be “equivalent” to the level of nullification or impairment (Article 22.4 of the DSU). This means that the complainant’s retaliatory response may not go beyond the level of the harm caused by the respondent. At the same time, the suspension of obligations is prospective rather than retroactive; it covers only the time-period after the DSB has granted authorization, not the whole period during which the measure in question was applied or the entire period of the dispute.”

        • even if you take out the punitive angle, the total harm the loss of aircraft sales calculated over the lifetime and NPVed will be far more then transaction. In fact we all know its not that unusual for the frames to be sold at a loss.

  2. The only ones winning with this are a he lawyers.

    Just damned stupid.

  3. Boeing and the USTR instigated all this. Boeing has been smarting ever since the launch of the A300. That Boeing (and the USTR) reject a negotiated settlement just goes to show that the company’s sense of entitlement and arrogance are breathtaking.

    If Boeing’s top management instead would have chosen to serve the interests of the company, not shareholders, they would have showed more concern for the loss of lives in the two MAX accidents, the reputational harm to the company, and the negative impact on future sales prospects of the 737 MAX.

    • Hello OV-099

      Regarding: “That Boeing (and the USTR) reject a negotiated settlement just goes to show that the company’s sense of entitlement and arrogance are breathtaking.”

      In my experience, when one side is eager to negotiate a settlement to a legal dispute and the other wants to see it through to the end, it tends to be the case that the side that is eager to negotiate a settlement is worried that they are going to lose big time, and the side that says “forget about it, see you in court”, is confident that they will win. If you are very, very confident that you will win a dispute, why not pursue the case to its end, take your big win, and settle the matter once and for all?

      • @AP_Robert

        IMJ, this is more of a clash of two cultures — the U.S. adversarial system vs. the E.U. inquisitorial system. The adversary system by which legal disputes are settled in the U.S promotes the idea that legal controversies are battles or contests to be fought and won using all available resources. In contrast, most European countries employ the inquisitorial system or a combination of the accusatorial system and the inquisitorial system where a court has a responsibility to see that the relevant evidence is being brought before it. The main emphasis in a European court, therefore, is the search for truth, whereas in an American courtroom, the emphasis appears to be on “winning at all costs” without commensurate concern for truth-seeking.

        WTO members are very likely to have divergent views on the nature of the WTO dispute settlement system, based on their own legal systems of adjudicating disputes. The Appellate Body of the WTO (WTOAB) seems to have followed a middle course so far. On the one hand, the Appellate Body has stressed the panel’s investigative role in a number of cases. On the other hand, the Appellate Body doesn’t require a panel to make on the basis of its own investigation, the complainant’s case (NB: a different panel is composed for each dispute).

        Hence, it’s not too difficult to ascertain the point of view of the European Commission on trade matters; in a successful negotiation, everyone wins — i.e. the objective should be agreement, not victory.

        Oc course, the dominant concern for Boeing and the USTR have been to use a style of bargaining that has tried to maximise the interests of Boeing. The dominant strategy in this mode include manipulation, forcing, and withholding information. This version is also called “claiming value” since the goal in this type of situation is to increase your own value and decrease your opponent’s.

      • @APR
        @ OV
        ‘In my experience, when one side is eager to negotiate a settlement to a legal dispute and the other wants to see it through to the end, it tends to be the case that the side that is eager to negotiate a settlement is worried that they are going to lose big time, and the side that says “forget about it, see you in court”, is confident that they will win. If you are very, very confident that you will win a dispute, why not pursue the case to its end, take your big win, and settle the matter once and for all?’

        Are you suggesting that Boeing have a stronger case? Or is it more of a matter that Boeing are far more willing to resort to legal means. If we take the case of the aggressive tactics used by Boeing when pursuing Bombardier over the Cseries as a case in point then it appears the latter is the case.

        There may be wrinkles to which I am not privy but at present the WTO case for Airbus subsidy is not going well and the shutting down of the A380 programme may suggest that any subsidy relating to that programme is voided rightly or wrongly. This leaves a matter of using the appropriate interest rate on the A350 programme as the only point in which Boeing has a case. On the other hand the case against Boeing relating to direct subsidy at state level appears quite solid at the moment.

        Please disavow me of that understanding if I am misinformed. I am inclined to agree with OV-099 insomuch as the litigation hungry nature of US business

        • @sowerbob

          Pretty good editorial today from Flight International:

          One central plot device in the Charles Dickens classic Bleak House is a long-running court case referred to as Jarndyce v Jarndyce.

          A dispute over inheritance, the legal fight drags on for generations until the whole estate is consumed and the case is eventually abandoned.

          Dickens used the fictional case to attack the court system, disparaging the length and futility of civil suits in which the only winners are the lawyers.

          The current sparring between Europe and the USA over subsidies paid to airframers Airbus and Boeing has not quite been running quite as long as Dickens’ fictional equivalent.

          However, the 15th anniversary of the initial complaint to the World Trade Organization (WTO) is rapidly approaching, with no resolution in sight.

          Now, imposing tariffs will IMJ lead to unintended consequences that potentially will harm Boeing much more than they would harm Airbus. The fact of the matter is that Airbus can quite easily further “Americanise” the A320 in in order to dodge most, if not all of the tariffs on Airbus single aisle aircraft entering into the U.S. market. The single aisle market in the U.S. is much more important to Airbus than being able to sell wide-bodies to U.S. airlines. Also, the current situation with the MAX could help to potentially further tilt the single aisle market share (in the U.S.) in favour of Airbus

          In contrast, Boeing is currently in no position to be able to set up complete manufacturing facilities and FALs in the EU — and they are vulnerable on both single aisles and wide bodies in E.U. markets if tariffs are imposed on Boeing products.

          At the moment Boeing appears to have lost the battle, but the “war” might be going on for some time yet. Ironically, Boeing and the USTR apparently went to the WTO believing self-righteously in their own hype and that they would “win” the battle — and seemingly ignoring that believing in your own hype can backfire, big time. That’s not really surprising as Boeing’s top management, at the time, were probably caught up in the Dreamliner marketing hype. When reality finally caught up with Boeing a few years later, the top management of the company resorted to falsehoods and deceptive statements on what was actually going on — or similar to what they were trying to do at the WTO, along with the typical influence peddling and free trade crusading by the USTR. I don’t know, though, when (or if) reality will finally catch up with Boeing and the USTR.

        • I have to agree on the winner take all slash and burn in the US system and the victims get nothing anyway.

          EU has been beyond measure better at dealing with the Facebook and Googles and MS of the world .

          That said I think a bit of history is well in order as well.

          When this was started Boeing was not feeding off the public trough as we say in the US.

          There was a valid argument that Free Lunch Aid was just that and there was consierable doucmeiton that proved not only did the coutnries as a group do it, they also did a great deal of infransure work breaks like Boeing is now getting in the idniual sites Airubs operts (UK, France, Germany)

          Bizarrely a roll over of the Marshal plan in Germany (900 million if memory serves) was used to do that (I think it was returned over time, no interest – the gift that keeps on giving)

          We can fast forward to now where Boeing has jointed the US corporate culture of feeding off the public trough as a business model.

          Not just Washington state, Charleston SC as well and playing them off against each other with other sites. While that is a US only issue, its relevant to the US Citizens who are getting hosed.

          Airbus of course took its share in Alabama.

          And in the end all I can do is shake my head, what a muck up it all is.

          I also have changed my perspective to a great degree. I don’t believe in Governments doing what the UK/France/Germany/Spain did, vast majority of the time its been a failure (at least done in the US)

          But the Airbus and the EU citizens have gained a great deal, a great deal has been returned (even if the A380 is a bad example of how it does not work)

          Its vastly better than what we are getting out of our Government industry relationship in the US.

          Unrestrained capitalism is as bad in the long run as Communism and socialism is in my view the compromise in between.

          • PS: I hate Dickens. Talk about overrated. Reading git was pure torture, the only good part out of it was some bad puns (much to my English teachers angst)

            As I recall Great Expectations and the bad guy I told the teach he Met His Pitfall (the class was quite tickled, the teacher not so much)

  4. Flight says up to 100% tariff on airliners, but awaiting commentary. Suspect they are studying BA/LH/AF/etc contracts to see who pays the costs of importation/cancelling currently on order aircraft.

    • According to my knowledge from radio, the EU’s list is only a first draft and EU companies can make remarks. Final list should just has a value of 12 billion.

      This is though as damage compensation and not to just compensate tax reliefs.

  5. From the EU list: “88024000 * aeroplanes and other powered aircraft of an of an unladen weight > 15.000 kg (excl. helicopters and dirigibles)”

    Typo, repeating “of an” shows this is a hasty cut and paste job.

    • Wow that will hit Gulfstream as well!! I guess Bombardier must be hoping for it.

  6. Hopefully President Trump makes good on his threat to pull out of NATO.

    We will see how long Germany and France can subsidize Airbus when they have to start paying more than 1% of GDP for defense.

    No more free lunch.

    • Maybe the USA accepts war related costs as defense spending. Main source for refugees in the EU are wars initiated by the USA.

      Not being a NATO member also means US has to close all installations within e.g. Germany. Installations like AFRICOM are not related defending Europe.

      As an European, I dislike to pay for insane US wars.

    • Anecdotal comment only …

      The US has as much if not more invested in NATO (etc.) than anyone else.
      A pillar of the US economy is military spending domestically and internationally.
      To state it plainly, the US simply can’t afford peace.

      All this bluster about leaving NATO is just that, bluster.
      My guess is Trump Inc. (and buddies) is heavily invested in BA, RTN, etc. and needs to keep the revenue stream coming.

      Anecdotal … perhaps?

      • Guys, alert, drift way off topic not that I am not or have not been guilty.

    • They will just do it the way the US does, by giving Airbus fat military contracts like Boeing gets.

  7. Presumably at a time like this with tariffs looming, Airbus are supplying aircraft to US customers at the original prices agreed.

    Meanwhile Boeing are not delivering 737MAX aircraft to European customers due to the on-going grounding and may have to renegotiate on price, if the tariff comes in before the recertification. Presumably some purchasing shenanigans could be used to avoid that, e.g. paying for them whilst they’re still unflyable and on the ground in the USA. Sounds risky to me.

    But could this be another reason why Boeing are in such a hurry to restore the 737MAX to flight? Hurrying is never a good idea, that’s what caused all the problems with MCAS in the first place.

    What a mess.

    Tariffs could really spoil the cost equation for big Boeing customers in Europe like Ryanair. I wonder what else has to happen before they cancel and buy A320s instead?

    • Other than the comment about rush to get 737 back in the air, ok.

      Boeing has been working on the muck up for 5 months now.

      I don’t call it a rush.

      Its fair if its ok and I grant them the need to get it flying again.

      If the regulators feel its not safe then that is their job to stop it until it is (or determine it can’t be)

      And congress can restrain the trade war if they want to.

  8. The long an short of this whole tariff saga is brought on by Boeing. This tactic has been applied to competitors in order to slow and / or kill them off as Boeing hate competition. They do not believe in a fair playing field.
    1) The Tariff saga with Airbus going on for 15 years
    2) The tanker replacement which Airbus won with their A330 MRTT and Boeing cried foul and got their way for a new tender which they won with alterations to the tender terms to suit Boeing. The A330 MRTT is operational but the KC
    3) The recent C Series saga where they did not say or do anything when Bombardier was struggling to get the C Series developed because it was not a threat then. The moment the C Series come into the market and won an order from Delta, Boeing came up with the same accusations made about Airbus and accused Bombardier of under cutting to get the sale. In addition they also brought up that the C Series is hurting Boeing sales but Boeing do not have a plane in that category to compete or suffer any loss of sales. On the subject of illegal subsidy, the Air Force awarded a development contract to Boeing, is that not an illegal subsidy?
    The above are examples of the way Boeing respond to any competition period.

    • It is indeed interesting to see how Boeing’s tactics have repeatedly failed to bring in good results. The three tactical avenues you refer to have not produced the goods for Boeing. You’d think that at some point they’d step back an re-evaluate the direction they’re taking.

      No sign of that happening yet.

      The longer they don’t, the less time they’ll have to address the company’s weaknesses. It may already be terminal, we just don’t know it yet.

      Ultimately it should be a case of letting their aircraft do all the talking, not Boeing’s PR / lobbying / trade dispute office. The only reason that they’ve had to stoop so low is that, by and large, they’ve dropped the ball on quality aircraft design, build and delivery.

      In comparison Airbus are, presently, sitting pretty. That’s a very dangerous position to be in. If they start really turning the screw (A321XLR, 350 upgrades, A320 replacement? etc) in the absence of any matching Boeing product launches, we’ll know that Airbus aren’t just resting on their laurels.

      • Airbus never made a tanker to the KC46 specifications.

        The USAF violated the law in giving the A330MRT points for features that the RFP did not allow for and did not ding them for those areas they went negative in (fuel burn and ramp space)

        The GAO seldom over turns bids, this one was. Those are career officials not political hacks.

        When they overturn something its not a miner procedural issue, its a major bust in the allowance

        And, the initial bid money is immediately dispensed, Airbus got over a billion of the US tax payer money for that.

        That is a US issue that needs to be changed, but it is there never the less.

  9. From a LH/AF/KL/BA (and all others) perspective How about putting BA airplanes under US lease companies and then leasing them? And vice versa for any US Airbus customers?

    From a A320 production perspective in Mobile, AL and wing shipsets for the upcoming A220 production, this will hurt the region badly (if aircraft structures have tariffs on them) – where is the America First mantra there?

    • Bob: The last part you are attempting to interject logic in this. It might as well have been Ver 1.0 of MCAS in that regard.

      At some point congress will have to get off its sorry butt and correct things (and yes its been done, post Civil War with Johnson)

  10. The Office of the US Trade Representative sees things differently from most (everyone?) posting here, see below. I still don’t understand why Airbus would be begging for a negotiated settlement if the confidence they claim in their PR releases about the strength of their case, was shared by their trade lawyers. Why not see the case through to the end and score your big win if you are so confident in your case?

    The quote below is from a statement at the US Trade Representative’s web page, at the link after the quote.

    “Washington, DC – The World Trade Organization (WTO) today released an appellate report rejecting arguments by the European Union (EU) that the U.S. federal and state programs gave more than $10 billion in subsidies to Boeing large civil aircraft.

    In 2017, a WTO compliance panel rejected EU arguments that 29 state and federal programs allegedly conferred $10.4 billion in subsidies to Boeing over six years. The panel found only one program, a Washington state tax measure worth an average annual value of approximately $100 million from 2013-2015, to be WTO-inconsistent. The EU filed an appeal arguing that the panel should have found against the United States on more of the EU claims. The compliance appellate report today confirms that the only WTO-inconsistent program is that Washington state tax measure.

    These findings stand in sharp contrast to the compliance appellate report issued last year in the U.S. challenge to EU subsidies to Airbus, which found the EU continued acting contrary to WTO rules in providing $9 billion in subsidized financing for Airbus to launch its two largest aircraft, the A380 and A350 XWB. A WTO arbitrator is currently evaluating the U.S request to impose approximately $11 billion in annual countermeasures in response to the damaging trade effects of the EU subsidies.

    “For years, European governments have provided massive subsidies to Airbus that dwarf any U.S. subsidies to Boeing,” said U.S. Trade Representative Robert Lighthizer. “This report confirms what every other WTO report on these issues has found: the United States does not provide support even remotely comparable to the exceptionally large and harmful EU subsidies to Airbus. It is long past time for the EU to stop their subsidies and let our world-class aircraft manufacturers compete on a truly level playing field.”

    The report issued today has its origins in the EU’s original 2004 case alleging the U.S. provided unlawful subsidies to Boeing. In that case, the WTO found that the United States provided Boeing with $3.2-4.3 billion in subsidized research and development funding and income tax benefits, with far more limited market effects than the EU’s subsidies to Airbus.

    “In response to the WTO’s findings, the United States modified the research and development funding and revoked the income tax benefit to remove any adverse effects to the EU. The EU then filed a complaint in October 2012 alleging that the United States failed to comply with the findings against it. The WTO established a compliance panel to evaluate that question, resulting in the report issued in June 2017, which rejected 28 of 29 EU claims. Today’s appellate report confirms that finding.”

    • The USTR sounds like a broken record.

      “For years, European governments have provided massive subsidies to Airbus that dwarf any U.S. subsidies to Boeing,”

      Ay, there’s the rub. The only thing that has been accomplished to date — in a dispute that was launched by the George W. Bush administration in 2004 — is proving that both the U.S. and the respective E.U. countries subsidy their aircraft OEMs. The problem for the U.S. side, though, is that after 14 years of litigation of the dispute at the WTO, the Appellate Body has confirmed the legality of European (repayable) Reimbursable Launch Investment (RLI) loans for civil aerospace development projects and that RLI loans do not constitute a prohibited subsidy.

      Now, the USTR said at the outset of the dispute that the U.S. side would agree to a negotiated settlement that would be bringing an end to what they defined as WTO-inconsistent subsidies, would be the best outcome. The European Commission said, at about the same time, that it would welcome negotiations, but would not accept preconditions forcing it to renounce RLI loans for European industry. The USTR responded by saying they had no preconditions, but if the EU insisted on keeping “launch aid” in its present form, any negotiations would be unlikely to be successful.

      So, there we have it. Thanks to the actions by Boeing and the USTR, RLI has been ruled to be legal instrument by the WTO. Thus, it’s a misconception (of yours) that Airbus is somehow begging for a negotiated settlement, when the problem is that Boeing and the USTR don’t seem to accept that they’ve essentially lost the case.

      The raison d’etre of the U.S. taking the E.U. to the WTO was the U.S. claim that Airbus received illegal subsidies through “launch aid” (RLI) and that Airbus subsidies coincided with the exit of Lockheed and McDonnell Douglas from the civil airliner market and resulted in Airbus overtaking Boeing in deliveries in 2003.

      To win its case, each side must not only prove that the other paid subsidies, but that in the case of “actionable” subsidies these caused damage to itself.

      With respect to the L1011 and the DC-10, both Lockheed and McDonnel Douglas fought a war of attrition for a market in the 1970s that could not support each of them. Neither lived up to its sales or profits potential. When Lockheed closed its TriStar production line in 1984, withdrawing from the civil aircraft market, it had sold 244 aircraft. McDonnell Douglas attempted to keep pace through its various stretched versions of the DC-9 and the MD 80s, 82s, 83s, and 90s. In the case of McDonnell Douglas, the company was in the 1980s, essentially, attempting to develop its proven DC-9 and DC-10 technology, rather than run the risk of committing itself to investing the necessary capital for a new single aisle to compete with the A-320, and a new wide-body twin derived from the DC-10.

      As for Airbus overtaking Boeing in deliveries in 2003, the USTR at the time seems to have forgot to mention how much more Boeing was exposed than Airbus during the market downturn following 9/11. In fact, while deliveries fell about 6 percent at Airbus from 2001 to 2003, deliveries at Boeing plummeted by 55 percent during the same time period. Hence, it’s obvious that the USTR resorted to falsehoods and deceptive statements in their opening salvo at the WTO — similar, in fact, to how the US government tried to bully the rest of the world in accepting their case for going to war against Iraq (i.e. using falsehoods and deceptive statements on how the regime in Baghdad was in possession of WMDs).

      • Hello OV-099,

        Regarding: “the problem is that Boeing and the USTR don’t seem to accept that they’ve essentially lost the case.”

        Below is an excerpt from the WTO’s summary, repeat the WTO’s summary, and not the Boeing PR department’s summary or Airbus PR department’s summary, of the status of Boeing’s DS316 complaint against Airbus and the EU. See the link after the excerpt for the full summary, and also hours and hours of additional fun trade dispute reading.

        In the reality that I live in, and in my understanding of the English language, the content of this excerpt is grossly inconsistent with your claim that Boeing has lost the case.

        “Conclusion: Based on its review of the Panel’s analysis, the Appellate Body ultimately upheld the Panel’s conclusion that insofar as significant lost sales in the twin-aisle markets (in which Airbus and Boeing sell the A330, A350XWB, 767, 777, and 787 product families) and significant lost sales and impedance in the very large aircraft markets (the A380 and 747) are concerned, the European Union had failed to comply with the recommendations and rulings of the DSB in the original dispute because the underlying subsidies continued to exist and cause adverse effects. The Appellate Body, however, did not uphold the Panel’s findings of displacement in these two markets or its finding of impedance in the twin-aisle market. With regard to the market for single-aisle aircraft (in which the A320 and Boeing 737 compete), the Appellate Body observed that the Panel’s findings concerned primarily the effects of subsidies that had expired before 1 December 2011 (the time by which the European Union had been required to comply with the recommendations and rulings of the DSB in the original dispute). The Appellate Body was not convinced that the Panel’s analysis in this regard provided a sufficient basis to find that subsidies provided to Airbus continued to cause adverse effects in the market for single-aisle aircraft.

        On this basis, in respect of subsidies existing in the post-implementation period, the Appellate Body upheld, albeit for different reasons, the Panel’s conclusions that “{b}y continuing to be in violation of Articles 5(c) and 6.3(a), (b) and (c) of the SCM Agreement” insofar as the twin-aisle LCA and VLA markets are concerned, “the European Union and certain member States have failed to comply with the DSB recommendations and rulings and … the obligation under Article 7.8 of the SCM Agreement ‘to take appropriate steps to remove the adverse effects or … withdraw the subsidy’”; and that, “{t}o the extent that the European Union and certain member States have failed to comply with the recommendations and rulings of the DSB in the original dispute, those recommendations and rulings remain operative.”

        • AP_Robert

          In the reality that I live in, and in my understanding of the English language, the content of this excerpt is grossly inconsistent with your claim that Boeing has lost the case.

          You may have a firm grasp of the English language, but you seem to have missed-out on the context in which I stated that that Boeing and the USTR have essentially lost the case.

          When Boeing got the USTR to transform its trade grievance vs. Airbus into a WTO dispute, the general narrative in the U.S. was that Airbus could not compete with Boeing in a free-enterprise environment if Airbus weren’t subsidised by European governments — while professing their own innocence in receiving support from the U.S. government — as if Boeing weren’t guilty of receiving subsidies themselves; particularly with respect to massively hidden subsidies, such as unprecedented prohibited production subsidies for commercial aircraft.

          After 15 years of self-righteous and hypocritical squawking on the part of Boeing and the USTR in Geneva — that Airbus is guilty and Boeing is squeaky-clean — their case now appears to have fallen flat in Geneva, and their actions appear to have backfired, big time. Boeing’s egregious hypocrisy has been laid bare for all the world to see, as the Appellate Body of the WTO has confirmed that Boeing is a heavily subsidised company.

          As I said, due to the actions by Boeing and the USTR, RLI has been ruled to be legal instrument by the WTO. RLI (“launch aid”) has been Boeing’s major grievance against Airbus.

          The fact that Boeing and the USTR have been unsuccessful in trying to get the WTO to rule RLI as an illegal instrument, and that the Appellate Body of the WTO has confirmed that Boeing itself is a heavily subsidised company, would seem to indicate that Boeing has essentially lost the case as they have been unsuccessful in their crusade to outlaw RLI — i.e. Boeing’s (and the USTR’s) major grievance. The double whammy here, with respect to losing on their major grievance, is that the WTO has confirmed that Boeing is as subsidised, or even more subsidised than any other aerospace OEM.

          This must be a particularly damaging and hurtful blow for Boeing — that their egregious hypocrisy has been laid bare at a time when analysts and the public is questioning not only their engineering competence, but their morals as well.

    • @AP Roberts

      I think the Airbus position reflects any or all of the following:

      – They see it as a distraction technique by Boeing to follow the MAGA rhetoric without any substance.
      – The legal sanction is typically less sought in Europe
      – The mindset of Airbus is substantially risk averse with respect to legal remedy.
      – Senior management are licking their wounds from the bribes scandal.
      – In any litigation there is a downside risk that is difficult to manage.
      – The geopolitics of all of this means the impact of a win will largely be negated.
      – They feel they are better positioned without antagonising a febrile POTUS.
      – The fact that any possible WTO ‘win’ would be in Pyrrhic at best.

      To be frank the last thing either party wants is a proper trade war and this is bringing us close, particularly with the ongoing ‘Chimerica’ disputes. The Trumpian dictate has damaged possibly irrevocably the standing of the US in international affairs. By linking themselves closely to this Boeing stands to lose a lot of goodwill around the world. Perhaps Airbus have made the simple decision to let Boeing waste a lot of time and effort on a legal approach that is highly unlikely to have any meaningful and lasting impact whatever the outcome.

      I gained effective legal redress a couple of years ago amounting to a substantial 7 digit settlement, I still regret the legal action I took though, something that was effectively forced upon me by my associates. Even when you win big it is questionable if you really win…

Leave a Reply

Your email address will not be published. Required fields are marked *