The European Union won the right to impose tariffs on $4 billion of US goods on Tuesday in retaliation against subsidies granted to plane maker Boeing, expanding a dispute that has already seen Washington put border duties on EU imports.
The World Trade Organization tariff award, which confirms a decision first reported by Reuters on Sept 30, threatens to exacerbate transatlantic trade tensions with just three weeks until the US presidential election on Nov. 3.However, negotiators on both sides say it could also lead at last to discussions to resolve a 16-year legal battle.
Both the United States and the EU have signalled interest in settling the dispute over subsidies each provided to their respective plane makers, Boeing and Airbus, while accusing the other of refusing to talk seriously.
Tuesday's decision, delayed by the Covid-19 pandemic, follows a WTO ruling last year allowing Washington to impose tariffs on $7.5 billion in EU goods over state support for Airbus, which has sites in Britain, France, Germany and Spain.
Combined, the two cases represent the world's largest ever corporate trade dispute.
The state of Washington has since moved to repeal tax breaks that benefited Boeing, while Airbus has announced it will increase loan repayments for the A350 plane to France and Spain in bids to settle the matter.
Sources on both sides say they want their industrial rivals to go further before agreeing to bury their differences.
The European Commission has said it would prefer a negotiated solution, but would impose tariffs without one.
It has already drawn up a list of US products it could target including planes, wine, spirits, suitcases, tractors, frozen fish, and produce from dried onions to cherries.
The earliest it could act is after a WTO meeting on Oct 26, but few analysts expect it to do so before the US election.