Airbus Backs European Tariffs On Boeing If Talks With US Fail

Europe should impose reciprocal measures on Boeing Co. if negotiations fail to lift recent US tariffs hurting the aerospace industry, according to Airbus SE Chief Executive Officer Guillaume Faury.

“Europe is in negotiations, and if these negotiations do not lead to a positive outcome, I imagine that — and this is what we hope for — reciprocal tariffs on aircrafts will be imposed to force a higher level of negotiation and return to the 1979 agreement,” he told reporters at an event in Paris. “This would be good for both the US and European industries.”

Faury was referring to the World Trade Organization civil aircraft treaty that for more than four decades has largely excluded the aviation industry from import duties on commercial aircraft and parts. He didn’t specify Boeing but the US manufacturer is a major exporter to Europe, and would stand to feel the bulk of any tariffs imposed on American-made planes.

The Airbus CEO also didn’t say whether he was calling for a policy response from the European Union, where Toulouse, France-based Airbus is located, or more broadly from the region.

The US has placed 10% tariffs on imports from the EU and dozens of major countries like the UK, as the administration of President Donald Trump seeks to negotiate more favorable trading terms. Airbus is feeling the pain from the new measures while European countries have held back from retaliation, shielding archrival Boeing for now from added duties on planes it sends to Europe.

Bloomberg News reported on Tuesday that the EU has plans to hit back with about €100 billion ($113 billion) in tariffs on US goods if a satisfactory accord can’t be reached.

The aviation industry is scrambling to adjust to the US surcharges, which have filtered through an aerospace supply chain to add costs and complexity to transactions that in the past have been duty free. Boeing has been hit by retaliation from China, and executives from US aerospace firms such as engine-maker General Electric Co., a major supplier to both Airbus and Boeing, have been lobbying for the tariffs’ removal.

“Airbus is also an actor of the civil aviation industry in the US and our imports to the US from other countries are also penalized,” Faury said, adding that the tariffs have created uncertainty in the industry and stalled investments.

Faury, who heads French Aerospace Industries Association GIFAS, said at a press conference that European regulations also need to be simplified to stoke innovation, investments and competitiveness.

EU member states have pledged to boost military spending as the US shows signs of wavering on decade of commitment to alliances in the region. European countries should buy more weapons from the continent, Faury said.

He called for more pan-European ventures, such as the satellite business merger under discussion between Airbus, Leonardo SpA and Thales SA. Matters related to sovereignty are not stalling the talks, just adding some “complexity,” he said.

“We will get there,” he said, without giving a definite time for a deal to be reached.