Boeing, to Fend Off Sanctions, Backs Ending State Tax Breaks

What’s more, they would come even as Boeing — the country’s largest manufacturing exporter — struggles to cope with the grounding of its 737 Max jet after two crashes. “Retaliatory tariffs would come at the wrong time,” he said. “Boeing is trying to get back on its feet, and we want to stay out of broader trade disputes.”

In a statement, Boeing said the legislation “demonstrates the commitment of Washington — and of the United States — to fair and rules-based trade, and to compliance with the W.T.O.’s rulings.”

Airbus declined to comment.

Scott Hamilton, managing director of the Leeham Company, an aviation consultancy, said the legislation was tactically savvy. “It’s a brilliant move on Boeing’s part to resolve its side of the W.T.O. trade dispute,” he said. “Airbus is now hanging out there with no leverage. Airbus suddenly has a very weak hand.”

The legislation would not eliminate the possibility of retaliatory tariffs but it removes a major cause for concern.

Even if this dispute is resolved, trade fights over the commercial aircraft industry are likely to continue, said Chad P. Bown, a senior fellow with the Peterson Institute for International Economics, a nonprofit research group. Airbus was created as a government consortium and has received billions in government aid since it was founded in 1970. And as a major military contractor, Boeing has benefited from Washington’s largess.

Still, Mr. Bown said Boeing’s move was notable. “It’s very difficult for Washington State and Boeing to give up their subsidies,” he said. “So anytime somebody gives up their subsidies that have been ruled illegal, that’s a big deal.”

Natalie Kitroeff contributed reporting.

Article source: https://www.nytimes.com/2020/02/19/business/boeing-subsidies-wto.html