The European Union (EU) has threatened to increase tariffs on US exports amidst trade tensions centering aircraft manufacturer Boeing, reports Sourcing Journal. The EU is exercising its legal rights under the WTO’s decision, but has called upon the US to agree to both sides abandoning their respective countermeasures immediately

In 2019, US had imposed duties worth $7.5 billion on EU products as the result of a World Trade Organization arbitration decision that ruled in favor of the US and American aircraft manufacturer Boeing. At the time, the WTO confirmed U.S. lawmakers’ charges that European multinational aerospace corporation Airbus, a direct competitor, benefitted unfairly from subsidies, negatively impacting Boeing’s business. Legislators moved swiftly to impose tariffs on EU goods that would pay down the damages.

In September, though, the WTO granted the EU and Airbus license to hit back, giving the green light to impose tariffs on U.S.-made goods worth $4 billion. On Oct. 26, the intergovernmental trade organization formally authorized the implementation of countermeasures against subsidies that have benefitted Boeing.

According to Dombrovskis, European Commissioner for Trade and Executive Vice President for Economy that Works for People, the proposed countermeasures bring EU to equal footing with the US, with sizable tariffs on each side related to the aircraft subsidies. Those duties include additional 15 percent tariffs on aircrafts as well as 25 percent tariffs on a range of agricultural and industrial products imported from the US.