The U.S. government on Thursday declared "sweeping victory" in a long-running, multibillion-dollar trade dispute with the European Union over subsidies to Airbus Group SE.

The Geneva-based World Trade Organization Thursday passed judgment on whether the European Union had eliminated illegal subsidies that it and some of its member states had extended to Airbus.

"The EU did not come into compliance with respect to the subsidies previously found, and it further breached WTO rules by granting more than $4 billion in new subsidized financing for the A350XWB," Airbus's newest long-haul plane, the office of the U.S. Trade Representative said.

U.S. Trade Representative Michael Froman called the ruling "a sweeping victory" and urged the EU to halt subsidies to Airbus "immediately."

The U.S. has signaled it could seek to impose at least $7 billion in retaliatory tariffs.

The WTO in a future ruling is expected to find the U.S. similarly didn't sufficiently address concerns about subsidies benefiting Boeing Co., people familiar with the process said.

At stake are potentially billions of dollars in tariffs the U.S. and EU could be allowed to impose on each other unless the WTO's subsidy concerns are addressed. Those tariffs, which haven't yet been set and don't have to be imposed by the winning side, could be applied to trade involving products or services other than planes or their components.

Before fines are imposed, the EU can appeal the latest finding in a process that is likely to take at least three months.

Mr. Froman said the subsidies the EU, Germany, France, the U.K. and Spain had provided to Airbus "have cost American companies tens of billions of dollars in lost revenue." The U.S. said subsidized financing to Airbus amounted to almost $22 billion.

The U.S. raised its initial objection in the Airbus case in 2004, alleging EU member states gave illegal subsidies to the Toulouse, France-based aircraft maker. The EU quickly launched a similar case against the U.S., arguing that the U.S. illegally subsidized Boeing, the world's No. 1 plane maker by aircraft built.

The two sides settled a previous dispute over subsidies in 1992, but the U.S. walked away from that deal in 2004, arguing Airbus had an unfair advantage. Efforts to return to the negotiating table have failed.

Write to Robert Wall at robert.wall@wsj.com and Doug Cameron at doug.cameron@wsj.com

 

(END) Dow Jones Newswires

September 22, 2016 10:55 ET (14:55 GMT)

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