Airbus offers concession to end U.S. tariffs

On Friday, European Airbus said it would amend the servicing of raised government loans from France and Spain in its “final” bid to lift US trade duties. Company calls on United States to resolve 16-year dispute over billions of dollars in aircraft subsidies.

The aircraft manufacturer has announced its agreement to pay higher interest rates on two lines of credit it received to develop the A350 aircraft, which entered service in 2015..

The European Union and France said the move towards higher interest rates should settle a dispute with the United States at the World Trade Organization. EU says it will respond with sanctions if it doesn’t.

«In the absence of a settlement, the EU will be ready to take full advantage of its own sanctions rights», – said the trade commissioner Phil Hogan.

The loans are part of a system targeted by the United States in the world’s largest corporate trade dispute, which also stems from Europeans’ denunciation of support for Boeing in the United States..

The waiver of the cancellation of Airbus subsidies led to the WTO approval of US sanctions imposed last year on European goods worth up to $ 7.5 billion, including wine and whiskey..

Trade groups prepare to escalate the scandal in the fall, when the EU is expected to gain WTO approval to strike back with its own trade duties on US goods based on subsidies to Boeing..

The WTO accuses both Europe and the United States of providing illegal support to their aircraft manufacturers. Over the past eight years, the dispute has been mainly about whether each of the parties obeyed these decisions with the corresponding numerous appeals.

«With this latest move, Airbus considers itself fully compliant with all WTO rules.», – stated to Airbus.

In May, the United States declared its full compliance with the WTO conclusions after Washington State lifted tax breaks for the aerospace industry, which benefited Boeing to a large extent.

Airbus makes concessions to remove US trade duties

This comes amid increasing pressure on Airbus and European governments from industries affected by US trade duties, including Scotch whiskey producers and Spanish farmers..

They are frustrated to be dragged into the struggle between aerospace giants just as their own industries are also facing the devastating effects of the coronavirus epidemic..

Airbus said US airlines also suffer from trade duties that apply to imported European aircraft..

European officials are also trying to lift US trade duties legally, but those attempts were thwarted by a procedural scandal after Washington blocked appointments to the WTO’s appellate body. President of the U.S.A Donald Trump criticized the WTO.

At the same time, the timetable for EU retaliatory sanctions has been cut by several months, to September or October, due to the difficulty of reviewing documents during the COVID-19 crisis.

«We are at an impasse and must get out of it. It is a way to show good faith and open the door to find a solution.», – a European source told Reuters, commenting on the decision on credit lines.

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