Airbus says US sanctions on its aircraft would have no legal basis

European planemaker Airbus said on Tuesday it saw no legal basis for the United States` move towards imposing trade sanctions on its aircraft and warned of deepening trade tensions. Washington on Monday proposed a list of EU products, from large commercial jets to dairy products and wine, on which to impose tariffs as retaliation for European aircraft subsidies. The EU and the United States have fought for over a decade over mutual claims of illegal aid to plane giants Boeing and Airbus. Both sides have been judged by the WTO to have paid billions of dollars of subsidies to gain advantage, and asked to stop or face potential sanctions.

 Airbus spokesman Rainer Ohler said the planemaker had taken measures to comply with the "relatively minor" outstanding requirements. U.S. talk of $11 billion worth of damage from EU subsidies to Airbus was excessive, he added.  "The amount is largely exaggerated and in any case will be defined by the WTO and not the U.S." Ohler said. Ohler said a WTO ruling last week against tax breaks for its U.S. rival Boeing should allow the EU to seek "even greater countermeasures."

He said the ruling showed "no willingness at all on the Boeing side to comply and confirms they are clearly in contravention with WTO rules." A source at the European Commission said the EU was preparing for possible retaliation. "All this is leading to unnecessary trade tensions and shows the only reasonable solution in this long trade dispute is a settlement," added Ohler.