European Commission Says Airbus Subsidies Solved

Spain and France announced that Airbus is going to repay subsidy launch loans at market rates -- Germany and the United Kingdom have already been paid back -- and the European Commission said July 24 that this “removes any grounds for the U.S. to maintain its countermeasures on EU exports and makes a strong case for a rapid settlement of the long-running dispute.” The World Trade Organization ruled last year that Airbus and the four countries were not in compliance with industrial subsidy disciplines, and the U.S. imposed 10% tariffs on Airbus planes and 25% tariffs on various foods and beverages, and some apparel and tools (see 1910020044).

Airbus CEO Guillaume Faury said in a press release, “These additional amendments to the A350 [repayable launch investments] demonstrate that Airbus has left no stone unturned to find a way towards a solution. This is a clear signal of support to those who are suffering from the severe impact of the tariffs imposed by the [Office of the U.S. Trade Representative], especially at a time when industries are hard hit by the consequences of the COVID-19 crisis.” USTR did not respond to a request for comment.

European Union Trade Commissioner Phil Hogan called on the U.S. to lift “these unjustified tariffs immediately. The EU has made specific proposals to reach a negotiated outcome to the long-running transatlantic civil aircraft disputes and remains open to work with the U.S. to agree [on] a fair and balanced outcome, as well as on future disciplines for subsidies in the aircraft sector.”

The EU said that if the U.S. does not lift the tariffs on $7.5 billion worth of European imports, the EU will put tariffs on U.S. exports once the Boeing ruling is released in the fall.