There’s an easy way for European governments to avoid the tariffs that the U.S. Trade Representative is threatening to levy in response to illegal aircraft subsidies. All they have to do is kill the subsidies and bring their behavior into compliance with treaty obligations under the World Trade Organization. The WTO ruled a decade ago that Airbus might never have brought any aircraft to market had it not received massive, prohibited subsidies, mainly in the form of euphemistically-named “launch aid.” When a similar complaint was leveled against the U.S., Washington eliminated the subsidies. Europe has spent ten years delaying action, which is why it now faces the prospect of tariffs. All it has to do is comply with WTO rules, and there will be no tariffs. I have written a commentary for Forbes here.
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