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B<\/span>oeing\u2019s<\/strong> lawyers, still smarting from the shock of losing their U.S. trade-court case against Bombardier\u2019s C-Series jets, are now awaiting an imminent ruling in a bigger trade fight over government subsidies.<\/p>\n In a case against Airbus that\u2019s slogged on for nearly 15 years and has seemed endless, Boeing now insists it\u2019s within sight of a final victory.<\/p>\n And though the dispute long predates President Donald Trump, his administration\u2019s hard-nosed \u201cAmerica First\u201d posture on trade disputes \u2014 ready to impose tariffs rather than negotiating settlements \u2014 adds a new edge of rancour and risk.<\/p>\n The U.S. filed suit against Airbus at the World Trade Organization (WTO) in 2004, and since then the gears of that court have ground slowly without any perceivable impact.<\/p>\n Yet Boeing\u2019s top lawyer, Michael Luttig, said in an interview that the law is about to catch up with Airbus and the European Union (EU).<\/p>\n \u201cBoeing committed itself some 15 years ago \u2026 and it has never blinked since,\u201d said Luttig. \u201cToday, we are months away from the imposition of tariffs.\u201d<\/p>\n Airbus is staring back, also refusing to blink.<\/p>\n A senior Airbus executive and trade lawyer, who asked not to be named because of the continuing legal proceedings, compared Luttig\u2019s threat of tariffs to \u201ca nuclear strike\u201d and pointed to the parallel EU case before the WTO that accuses Boeing of taking subsidies.<\/p>\n \u201cThe EU would be well-prepared to respond in kind and with much greater force,\u201d said the Airbus legal executive. \u201cThe EU will survive that first nuclear strike and will retaliate with megatons to the U.S.\u2019s kilotons.\u201d<\/p>\n In a speech in London last month, Airbus CEO Tom Enders said that under Trump, the U.S. is \u201cno longer fighting for opening markets but to close the U.S. market to \u2026 foreign competitors.\u201d<\/p>\n Citing the CSeries case, he accused Boeing of \u201cruthlessly surfing on this \u2018America-First\u2019 wave.\u201d<\/p>\n The risk that a multinational trade war could erupt with some of the nation\u2019s closest allies looks suddenly higher.<\/p>\n In September 2016, after multiple procedural steps and appeals, the last ruling in the United States\u2019 WTO case against Airbus found that\u00a0the European jet maker had fallen far short of remedying the harm to Boeing\u00a0<\/a>from illegal subsidies.<\/p>\n The EU immediately appealed. What\u2019s ahead this year, by late spring, is the final decision on that appeal.<\/p>\n Boeing\u2019s lawyers expect the court to largely uphold the 2016 decision. And Boeing says, that\u2019s it. It\u2019s the end of the appeals.<\/p>\n If Airbus loses, said Bob Novick, Boeing\u2019s outside counsel on the WTO dispute since 2003 and former general counsel to the U.S. Trade Representative, the U.S. would then immediately request authorization to impose retaliatory sanctions.<\/p>\n Boeing anticipates that the WTO will set the level of sanctions at $10 billion to $15 billion.<\/p>\n The U.S. government could then slap punitive tariffs up to that amount on whatever EU goods it selects for maximum political impact.<\/p>\n Boeing\u2019s tough talk may be partly a negotiating ploy. Still, if the WTO hands this loaded weapon to the U.S. government, it\u2019s unlikely the Trump administration\u2019s trade hawks will be shy about using it.<\/p>\n Jeff Bialos, a partner in the international law firm Eversheds Sutherland and a former Commerce Department official handling major trade litigation, said that typically at such an endpoint in a trade dispute, the two governments would negotiate some agreed settlement.<\/p>\n \u201cThe issue is, will the Trump administration, with its views on trade \u2026 have the ability to negotiate solutions?\u201d Bialos said. \u201cThe jury is out. We are going into uncharted waters.\u201d<\/p>\n Bill Perry, a Seattle-based international trade lawyer with Harris Bricken and a former U.S. Commerce Department attorney, thinks Trump will take \u201ca very hard line.\u201d<\/p>\n He pointed to the administration\u2019s imposition last month of tariffs on imported solar panels, to punish China for selling finished panels in the U.S. below their cost, and on washing machines, targeting Korean manufacturers.<\/p>\n \u201cCould this be the first row of bricks in a protectionist wall Trump intends to put up?\u201d Perry asked.<\/p>\n At the very least, the stage looks set for brinkmanship, if not an open trade war.<\/p>\n Boeing lawyers expect the imminent threat of tariffs to focus minds in the EU and perhaps to precipitate settlement talks in which they would then have the upper hand.<\/p>\n The top Airbus executive warned that Boeing is on the hook for its own illegal subsidies in the parallel WTO case filed by the EU \u2014 and so whatever the U.S. does, the EU can and will match.<\/p>\n \u201cBoeing can try for sanctions. And if they do, we will too,\u201d he said.<\/p>\n In the EU case against Boeing, the last ruling in June found that\u00a0Boeing had failed to remedy the harm to Airbus from just one set of subsidies: the tax reduction<\/a>\u00a0that was part of Washington state\u2019s aerospace incentives.<\/p>\n Boeing has appealed that ruling.<\/p>\n An awkward detail for the EU is that its case against Boeing was filed as a countersuit some nine months after the U.S. filed against Airbus, and so it lags the U.S. case by roughly that amount of time.<\/p>\n The decision on Boeing\u2019s appeal won\u2019t come out until late this year or even next year. In the meantime, the U.S. may act.<\/p>\n The Airbus executive dismissed the delay between the cases \u2014 \u201ca few months\u201d\u2014 as insignificant.<\/p>\n He compared it to a pistol duel, where one person gets to fire first, but knows that the other will survive and will get a chance to fire back.<\/p>\n The EU will have plenty of ammunition, he contended. When the time comes to add up the compensation needed, he said the EU will count every airplane Boeing sells, including future sales.<\/p>\n \u201cEvery sale of a 787 is a subsidized sale and everyone will count against Boeing when judgment day comes,\u201d the Airbus executive said.<\/p>\n If Boeing\u2019s 15-year pursuit of Airbus at the WTO has been tenacious, the legal attack it launched on Bombardier last April was even more fiercely aggressive. And even though it failed, pushing the case had consequences for Boeing.<\/p>\n Geoffrey Gertz, a researcher on the politics of trade at the Washington, D.C.-based Brookings Institution, pointed out that in the Delta jet sale won by Bombardier\u2019s CSeries that was central to the case, \u201cthere wasn\u2019t much at stake\u201d for Boeing because it wasn\u2019t offering its own jets against the smaller aircraft.<\/p>\n Yet pursuing the case alienated both the Canadian and British governments, putting at risk large defence contracts, including a contract to supply Canada with F\/A-18 jet fighters valued at more than $5 billion.<\/p>\n It also antagonized major commercial-airplane customer Delta.<\/p>\n In a subsequent sales campaign in December that mattered much more to Boeing,\u00a0Delta chose to go with\u00a0<\/a>Airbus when it bought\u00a0<\/a>100 larger planes<\/a>.<\/p>\n \u201cBoeing might be rethinking whether that was a miscalculation,\u201d Gertz said.<\/p>\n An open trade war with major economic partners could be even more damaging, not only for Boeing but for the U.S.<\/p>\n That\u2019s a belief central totraditional, pre-Trump Republican Party policy.<\/p>\n President Ronald Reagan in 1986 dismissed congressional demands for import tariffs as \u201cflimflammery\u201d and warned against the dangers of protectionism.<\/p>\n \u201cThe truth is these trade restrictions badly hurt economic growth,\u201d Reagan said.<\/p>\n \u00a0The unpredictable consequences of tariffs are evident in the case of REC Silicon, which produces polysilicon, a raw material used in making solar panels, at a $1.7 billion manufacturing plant in Moses Lake.The Chinese solar-panel industry once imported polysilicon largely from the U.S.<\/p>\n But after an earlier round of the solar-panel trade fight, China in 2014 retaliated by imposing tariffs on U.S. polysilicon that forced REC to cut 500 jobs.<\/p>\n A letter sent to Trump by REC employees in early January said that \u201cnow the remaining jobs are at risk\u201d and urged Trump to announce \u201ca comprehensive settlement\u201d with China.<\/p>\n Instead, Trump applied new tariffs.<\/p>\n The risk is a tit-for-tat response.<\/p>\n Last month, in retaliation for the Commerce Department\u2019s initiation in December of a trade case against imports of aluminium sheet from China, the Chinese government started its own case against U.S. exports of sorghum grain to China.<\/p>\n \u201cIt signals the possible start of a trade war with China,\u201d said trade lawyer Perry in a newsletter to clients this month. \u201cThere is a price to pay for U.S. tariffs and trade actions.\u201d<\/p>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n![\"Airbus](\"https:\/\/static.seattletimes.com\/wp-content\/uploads\/2018\/02\/714fb5f6-0229-11e8-8bd9-c6d5fe1e4fbd-780x501.jpg\")
A WTO endgame<\/h2>\n
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![\"\"](\"http:\/\/moovafrica.com\/news\/wp-content\/uploads\/2018\/01\/Sameday-Cargo-Delivery-1.jpg\")
<\/p>\nA duel with pistols drawn<\/h2>\n
Trade war consequences<\/h2>\n
![\"The](\"https:\/\/static.seattletimes.com\/wp-content\/uploads\/2018\/02\/9bf3ab84-0222-11e8-8bd9-c6d5fe1e4fbd-1020x680.jpg\")
Fight or settle?<\/h2>\n