The Boeing chalet at the Farnborough air show in Hampshire, England, on July 15, 2014

Governor Jay Inslee of the U.S. state of Washington on Wednesday voiced support for proposed bills to suspend a tax break for Boeing Company in order to avoid punitive tariffs from Europe.

Washington lawmakers are introducing bills to remove the main aerospace tax benefit granted to the top U.S. airplane manufacturer 16 years ago, to head off a tariff fight with the European Union (EU).

“There is broad agreement in Olympia (the state’s capital) that we need to act this session to address the WTO issue in order to avoid retaliatory tariffs that would damage not just our commercial aircraft industry, but other important Washington exports,” Inslee said in a statement.

He said the bills have received support from Boeing, which would see its tax incentive suspended until the United States and the EU reach an agreement over controversial aircraft subsidies.

Last year, the United States imposed 7.5 billion U.S. dollars tariffs on Europe-made products to penalize the EU for giving subsidies to Boeing’s arch rival Airbus after the U.S. government won approval to do so from the World Trade Organization (WTO).

However, the EU is also expected to get green light from the WTO to take similar tariff actions against the U.S. side, as the world trade regulatory body blamed both sides for granting unfair subsidies to each of their own companies.

“The potential negative impact of that is highlighted by the fact that Boeing has said it would support ending that tax incentive. The bills call for a process that could reinstate incentives if allowed under a future agreement with the EU,” Inslee said.

The Seattle Times newspaper said the aerospace tax break had saved Boeing nearly 100 million dollars in 2018, which gave the U.S. aircraft giant hundreds of millions of dollars in tax benefits every year. Enditem

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