WASHINGTON -- A decades-long struggle between the world's two largest aircraft makers escalated into a trade war between the United States and Europe, just as France-based Airbus stepped up plans to challenge Boeing for lucrative US defense contracts.
US trade officials filed a complaint yesterday with the World Trade Organization, contesting what they say are unfair subsidies to Airbus by European governments.
The European Union quickly retaliated, filing its own complaint with the WTO challenging US tax breaks for Boeing.
Tension between the companies has escalated in recent years as Chicago-based Boeing and Airbus compete in a range of civilian and military aircraft markets.
Airbus's parent, Paris-based EADS, said it has acquired US military electronics company Racal Instruments Inc. for up to $130 million. EADS said the purchase would help gain a larger share of the US defense market, the world's largest.
The company opened a Virginia-based defense subsidiary Monday and has scored several recent victories in the United States, including a $75 million contract this week to supply 55 patrol helicopters to the Homeland Security Department.
Citing that success, US officials say Airbus has grown into the market leader and no longer deserves government help. US officials claim Airbus has unfairly speeded up development of the A380 and other planes thanks to $15 billion in subsidies from Germany, France, Spain, and Britain.
But Europeans decry an estimated $3.2 billion in aerospace tax incentives by Washington state to help secure final assembly of Boeing's planned 7E7 Dreamliner in Everett, Wash.