US threatens sanctions as WTO raps Airbus subsidies

The WTO ruled Tuesday the EU had maintained illegal support to Airbus, prompting the US to threaten sanctions against European products in the first of two key aircraft subsidy decisions due this year. The WTO report coincides with mounting trade tensions over US aluminium and steel tariffs and the impact on European firms of Washington’s decision to exit the Iran nuclear pact. It is also part of a two-way battle between the EU and the US over aircraft subsidies that could spark tit-for-tat reprisals between the two trade superpowers. The WTO’s appeals body said the EU had failed to remove subsidised government development loans for the world’s largest airliner, the A380, and Europe’s newest long-haul jet, the A350, causing losses for Boeing and US aerospace workers. But the Geneva watchdog dismissed US claims that loans for Airbus’s most popular models, the A320 and A330, were also costing Boeing significant sales and in so doing narrowed the scope of one of the world’s longest and costliest trade spats. US Trade Representative Robert Lighthizer said the US would slap countermeasures on European goods unless the EU stopped “harming US interests”. WTO rules allow it to target any industry since all goods fall into one category.<br/>