US mulls boosting EU tariffs as WTO says Airbus keeps getting European subsidies

Washington has threatened to impose new tariffs on trade with the European Union after the World Trade Organization (WTO) ruled that the EU had not complied with an order to halt illegal subsidies to airplane manufacturer Airbus.

The US trade representative slammed the ongoing subsidies as “massive EU corporate welfare” following the WTO’s decision on Monday and insisted that American and European companies must compete on a “level playing field.”

“Strong action is needed to convince the EU that its interests lie in eliminating these market-distorting subsidies now and in the future so that our industries can compete on a level playing field,” trade rep Robert Lighthizer said in a statement.

In light of today’s report and the lack of progress in efforts to resolve this dispute, the United States is initiating a process to assess increasing the tariff rates.

In October, the WTO gave Washington the green light to slap the EU with $7.5 billion in new levies following a previous decision over illicit subsidies to Airbus – to date the largest WTO ruling in history – affecting imports of aircraft and agricultural goods from Germany, France, Spain and the United Kingdom.

While EU trade commissioner Cecilia Malmstrom has insisted that “we are not in a trade war,” the WTO is set to hear a European counter-case against Boeing next year, indicating more battles to come.

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The threat comes as leaders of 29 countries prepare to meet in London on Wednesday for a NATO summit. Though the officials are set to discuss the future of the NATO alliance, tensions between member states – the US-EU trade row included – could prove distracting.

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