Wednesday's award doesn't end the long-running trans-Atlantic dispute over aircraft: WTO arbitrators are expected to rule next year on how much the European Union can impose in tariffs following a separate decision that went against Boeing.
The agency's provisional list of products that are eligible to be targeted with tariffs up to 100% covers goods with an annual trade value of $25 billion and ranges from Airbus jets themselves to helicopters, wine, handbags and cheese.
The focus of nervous global financial markets will then shift to Washington where the US Trade Representative is expected to move quickly to narrow down a preliminary list of goods in line for tariffs, a US source said. After the EU's Airbus captured a significant share of the world market for civil aircrafts in early 2000, the U.S. launched a massive trade dispute against Airbus saying that the European company benefited largely because of launch aid/member state financing (LA/MSF) for large civil aircraft granted by France, Germany, Spain, and the United Kingdom.
It states that the USA can be authorised to apply tariffs worth $7.497 billion annually on the UK, France, Germany, Spain ('the Airbus nations') and the wider EU.
"My sense is that there will be a settlement only after both sides have imposed tariffs on each other", he said.
In a statement, the WTO said, "the United States may request authorization from the DSB to take countermeasures with respect to the European Union and certain member States, at a level not exceeding, in total, $7,496.623 million annually".
Such tariffs can take effect no earlier than mid-October because a key WTO panel needs to formally sign off on them first.
Turkish manufacturing activity recovers in September
There were reductions in new orders, with the investment goods sector the weakest performer - falling in output and new business. The Institute of Supply Management's closely watched index showed a decline in manufacturing for the second month in a row.
A separate ruling by the WTO - which is charged with ruling on cross-border.
The move, culminating a 15-year standoff, gives the Trump administration the legal cover to impose tariffs it has long threatened, escalating uncertainty for the economy at a time when the USA trade war with China is weighing heavily on businesses, particularly manufacturers.
In contrast, the United States has taken no steps to bring its support to Boeing into compliance with WTO law.
The tariff announcement furthers Trump's trade conflict with the EU. The ruling centred on Airbus' 350XWB _ a rival of Boeing's 787 _ and the double-decker A380, which tops the Boeing 747 as the world's largest commercial passenger plane.
Sectors most sensitive to global trade and exports from luxury goods to mining companies bore the brunt of the sell-off, with Gucci-owner Kering and Hermes down more than 2%.
The EU immediately threatened to respond to any U.S. move. However, we believe that resorting to tariffs now would be short-sighted and counterproductive.
President Donald Trump and European Commission President Jean-Claude Juncker have been locked in a broader trade dispute for more than a year, but progress toward a long-term agreement has proven challenging.
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