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US reignites Boeing-Airbus trade war despite COVID-19

written by Adam Thorn | March 19, 2020

The US has reignited its trade war with Airbus despite the coronavirus crisis, raising tariffs from 10 to 15 per cent on the European planemaker’s aircraft.

Analysts have said the decision, which came into effect on Wednesday, was taken to pressure the EU to comply with a World Trade Organization ruling on illegal aircraft subsidiaries.

Airbus previously pleaded for the government not to make the decision, saying in a statement, “The evolution of the global COVID-19 pandemic and its impact on the aviation industry reinforces the need to put this outdated case behind us and find a sustainable way forward for our industry.”

American Airlines Boeing 777-300ER N720AN touches down at Sydney Airport. (Seth Jaworski)
American Airlines Boeing 777-300ER N720AN touches down at Sydney Airport. (Seth Jaworski)

The move is the latest in a 16-year, tit-for-tat trade war that has seen various levies and fees enforced by the EU to protect Airbus, and the US to shield Boeing.

It also comes a month after Boeing seemingly called an end to the feud by asking for a key tax break to be suspended.

The World Trade Organization has accused both of the world’s largest planemakers of receiving billions of dollars of unfair subsidies in cases dating back to 2004.

Boeing said in a statement in February, “This legislation demonstrates the commitment of Washington – and of the United States – to fair and rules-based trade, and to compliance with the WTO’s rulings.”

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The state’s Governor, Jay Inslee, claimed Boeing had initiated the decision.

Governor Inslee said, “There is broad agreement in Olympia that we need to act this session to address the WTO issue in order to avoid retaliatory tariffs that would damage not just our commercial aircraft industry, but other important Washington exports.

“Boeing has said it would like that tax incentive at least suspended until the issue is fully settled with the European Union.”

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