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US warns of tariffs as WTO rules EU failed to fix Airbus subsidies

The World Trade Organization confirmed in a final ruling that the EU provided billions of dollars in illegal subsidies to Airbus jets and that it had failed to fix the harm done to the U.S., which warned of imposing punitive tariffs on European products.

The WTO appellate body said in a new report that EU subsidies to the A350 XWB and A380 aircraft were causing significant losses to Boeing Co., and that the bloc did not comply with its WTO obligations in resolving the issue.

"This report confirms once and for all that the EU has long ignored WTO rules, and even worse, EU aircraft subsidies have cost American aerospace companies tens of billions of dollars in lost revenue," U.S. Trade Representative Robert Lighthizer said.

"It is long past time for the EU to end these subsidies. Unless the EU finally takes action to stop breaking the rules and harming U.S. interests, the United States will have to move forward with countermeasures on EU products," Lighthizer added.

Boeing Chairman, President and CEO Dennis Muilenburg declared victory, urging the EU and Airbus to fully comply with the ruling.

"Today's final ruling sends a clear message: disregard for the rules and illegal subsidies is not tolerated," he said in a statement.

The U.S. aerospace giant expected the U.S. tariffs to be implemented as early as 2019, amounting to billions of dollars in duties per year.

"This is expected to be the largest-ever WTO authorization of retaliatory tariffs," Boeing said.

The final WTO ruling on the case, which was initiated in 2006, adds friction to the ongoing trade row between the U.S. and the EU.