WASHINGTON — The World Trade Organization granted the United States permission to impose $7.5 billion of tariffs annually on the European Union as part of a long-running complaint over subsidies given to European plane maker Airbus, clearing the way for the Trump administration to tax European airplanes, wine and other products.
The ruling is the largest authorized retaliation in the WTO’s history, and it brings to an end a roughly 15-year dispute over the financial assistance that Europe provides to its major plane maker. But it could tip off a further escalation, worsening tensions between the United States and the European Union that have already been strained by President Trump’s confrontational approach to trade.
The World Trade Organization ruled last May that Europe had illegally subsidized several of Airbus’s models, to the detriment of its American competitor, Boeing. In the latest ruling this week, the global trade body announced the value of the damages that the United States could seek to recoup by imposing tariffs.
The United States Trade Representative has already prepared two lists of up to $25 billion worth of products that it might tax, including airplanes, fish, wine, leather purses, carpets and clocks. It has yet to announce its final decision on which goods will be taxed.
Europe is prepared to respond to American tariffs with its own levies. The WTO is considering a parallel case that the European Union has brought against the United States for subsidizing Boeing, and the E.U. has drawn up its own list of $20 billion in American products that it could tax in response to that case. The WTO is expected to announce that decision early next year.
The European Union has been trying to head off the possibility of American retaliation through negotiations, but those talks have so far failed to produce an agreement that would forestall tariffs. Cecilia Malmstrom, the European commissioner for trade, said in an interview on Sept. 23 that the United States had been receptive to further discussions, but not to the idea of delaying its tariffs.
The European Union had sent the United States a detail proposal on crafting global rules on civil aircraft subsidies, she said, and she had discussed with Robert Lighthizer, the United States Trade Representative, while the two were in New York for the United Nations General Assembly last month.
“We already have too many tariffs in the world, so it would be unfortunate to do this,” Ms. Malmstrom said. “I think there is a high probability that they will impose those tariffs, and then we will have to respond.”