Disagreements between the U.S. and the European Union over airplane subsidies are escalating into a trade dogfight.

On Tuesday, the European Union decided to reactivate its complaint at the World Trade Organization alleging that airplane maker


(BA) - Get Report

receives improper aid, according to media reports.

Both sides put their WTO cases on hold in January and agreed to try to negotiate a settlement. But talks hit an impasse, and the U.S. announced Monday that it was reopening its complaint against Boeing rival


, a joint venture of the

European Aeronautic Defence and Space Co.


BAE Systems


The U.S. contends the launch aid that Airbus receives from European governments gives it an unfair advantage over Chicago-based Boeing. The E.U. claims that Boeing receives special subsidies in the form of state tax breaks and defense research grants.

Shares of Boeing were up 35 cents to $63.37 Tuesday.