Airbus SE (EADSY) shares rebounded in early Paris trading Thursday after the U.S. said it would exempt some of the planemaker's unfinished parts from import tariffs following a World trade Organization ruling on illegal state subsidies.
The U.S. Trade Representative said Thursday that it will slap tariffs of 10% on imported plane made by the Boeing (BA) - Get Report rival, but allowed exemptions for unfinished parts, such as wings and fuselage, some of which are made at the group's newly-built pant in Mobile, Alabama. The 10% levy is also lower than the 25% charge the USTR will apply to other European made goods, including British whiskey and French wines, despite the fact that its subsides from Brussels were at the heart of the WTO decision earlier this year.
"For years, Europe has been providing massive subsidies to Airbus that have seriously injured the U.S. aerospace industry and our workers," USTR head Robert Lighthizer said in a statement. "Finally, after 15 years of litigation, the WTO has confirmed that the United States is entitled to impose countermeasures in response to the EU's illegal subsidies."
Airbus shares were marked 4.1% higher at the start of trading in Paris to change hands at €119.02 each, extending the stock's year-to-date advance past 41.8%, compared to a 13.9% gain for U.S. rival Boeing.
The WTO ruling, made in March of this year, also deemed tax breaks for Boeing in the state of Washington to be a form of unfair subsidy, and will issue a remedy in that case sometime early next year.
In the meantime, EU officials warned the U.S. that if it "decides to impose WTO authorized countermeasures, it will be pushing the EU into a situation where we will have no other option than do the same."
"If the United States Trade Representative chooses to impose tariffs on the importation of aircraft and/or aircraft components, this will create insecurity and disruption not only to the aerospace industry, but also to the broader global economy," Airbus said in a statement following the WTO decision.
Boeing shares were marked 1.7% lower in pre-market trading Thursday, indicating an opening bell price of $366.47, following yesterday's 2.02% slide.