Hoping to avoid a tariff showdown, Boeing Co. has asked the Washington State Legislature to suspend a multimillion-dollar tax break.
With President Trump threatening to increase tariffs on imported goods that would affect Airbus, the European Union is threatening back, and the major aircraft maker hopes to avoid escalating retaliatory financial woes.
“Democratic leaders in the state House and Senate announced Wednesday they have introduced legislation to suspend Boeing’s preferential business-and-occupation tax rate,” reported the Everett Herald, hometown paper for one of Boeing’s major plants, “which has saved the company hundreds of millions of dollars since 2003. In 2013, that tax break was extended to 2040, helping convince the company to build the 777X in Everett.”
The rate trimmed $99 million from Boeing’s state tax bill in 2018, Herald writers Jerry Cornfield and Janice Podsada write.
Both Airbus and Boeing have received illegal subsidies from their host governments, according to the World Trade Organization.
Boeing issued a statement in support of the Washington State legislative action: “When enacted, this legislation will resolve the sole finding against the United States in the long-running trade disputes between Europe and the United States over Government support for the production of large commercial airplanes.”
The Trump administration imposed a 10 percent tariff on Airbus last year and has threatened to raise it to 15 percent.
Officials in Mobile, where Airbus has its only U.S. final assembly line, have urged the Trump administration to reconsider.
Airbus has an A320 final assembly line in Mobile and is building an A220 FAL adjacent to it.