PARIS (Reuters) – Europe’s Airbus said on Friday it would increase loan repayments to France and Spain in a “final” bid to reverse U.S. tariffs and jog the United States into settling a 16-year-old dispute over billions of dollars of aircraft subsidies.

The European Union, France and Spain said the move to raise interest rates paid by Airbus on A350 aircraft development loans should settle the row at the World Trade Organization and urged Washington to withdraw tariffs on EU goods.

“In the absence of a settlement, the EU will be ready to fully avail itself of its own sanction rights,” EU Trade Commissioner Phil Hogan said.

The loans are part of a system targeted by the United States in the world’s largest corporate trade dispute, which has also aired condemnation of U.S. support for Boeing.

The United States last year won WTO authorization to impose tariffs on up to $7.5 billion of EU goods from wine to whisky.

Trade groups are bracing for an escalation of the row in the autumn when the EU is expected to win WTO approval to hit back with its own tariffs over subsidies for Boeing.

The WTO has faulted both Europe and the United States for doling out illegal support to their respective jetmakers. But for the last eight years, the argument has been chiefly about whether each side obeyed those rulings amid multiple appeals.

“With this final move, Airbus considers itself in complete compliance with all WTO rulings,” Airbus said.

In May, the United States declared itself in full compliance with WTO findings after Washington state abolished aerospace industry tax breaks that largely benefited Boeing.

Reuters
Photo Rob Vogelaar