Boeing backs Washington state’s plan to drop tax breaks amid trade dispute with Europe and Airbus

Alan Boyle
·2 min read
Autoclave
Workers stand inside a giant autoclave that’s used to process parts for the wings of a 777X jet. (Credit: Boeing)

With Boeing’s blessing, Washington state lawmakers have introduced bills aimed at suspending tax breaks that have benefited the aerospace company to the tune of millions of dollars annually.

  • Today’s move represents the latest twist in a years-old dispute that has pitted Boeing and U.S. trade officials against Airbus and European regulators. Back in 2018, the World Trade Organization issued a final ruling that said Airbus received improper loan subsidies from European governments to launch its A350 and A380 jets. That opened the way for the Trump administration to impose tariffs on European goods amounting to $7.5 billion annually.

  • Tariffs on Europe-built airplanes and other European imports (including wine and whiskey) were imposed in October and fine-tuned last week. Meanwhile, the European Commission has been preparing countermeasures, in anticipation of what’s expected to be a final ruling by the WTO against Washington state’s tax breaks. Those breaks, which go back as far as 2003, were meant to attract 787 and 777X manufacturing operations to Washington.

  • In a policy turnabout, state officials say dropping the tax breaks could head off European tariffs and their impact on Boeing exports. “We need to act this session to address the WTO issue in order to avoid retaliatory tariffs that would damage not just our commercial aircraft industry, but other important Washington exports,” Washington Gov. Jay Inslee explained in a statement. Boeing applauded the move. “We fully support and have advocated for this action,” the company said. Aviation industry analyst Scott Hamilton said “Boeing may have just checkmated Airbus.”

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