‘A lose-lose game’: Airbus CEO warns of aviation trade war danger

Airbus Chief Executive Guillaume Faury says he will continue to advocate for a settlement on trade between the United States and Europe and called the imposition of tariffs a “lose-lose game” on both sides of the Atlantic.

The US was granted approval this month to impose tariffs on European Union goods with an annual trade value of around $7.5bn, over illegal government support for the European planemaker.

“A trade war on aviation would be a lose-lose game because the supply chains are very integrated,” Faury told reporters on Thursday at a briefing in Montreal. “We buy a lot in the US, we sell in the US and we are a US player as well.”

Tariffs, he warned, would raise costs on planes ordered by carriers at a specific price years ago.

The World Trade Organization (WTO) has found that Airbus and its US rival Boeing received billions of dollars of subsidies in a pair of cases marking the world’s largest-ever corporate trade dispute. Europe and the US have threatened tariffs after the WTO found that neither side adhered fully to its findings.

The scope of the tariffs is expected to be released in the week starting on September 30.

Washington sought permission to impose tariffs up to 100 percent on European goods worth $11.2bn a year. Those include aircraft and aerospace parts from Airbus host nations – Britain, France, Germany and Spain – as well a range of goods including wine, cheese and luxury goods from across the EU.

Roughly 40 percent of an Airbus aircraft is US content, Faury said.

The company operates a final assembly line for its narrow-body A320 planes in Mobile, Alabama. The planes are also made in Europe and China.

Airbus plans to expand the US site to build the smaller A220 as orders increase from customers such as Delta Air Lines Inc and JetBlue Airways Corp.

Airlines for America, a trade group representing US carriers, said tariffs on jetliners and aircraft parts would hurt the aviation industry and the broader economy.