The headquarters of the World Trade Organization in Geneva. [Photo/IC]

The World Trade Organization (WTO) on Wednesday ruled that European countries illegally subsidized Airbus and therefore the United States is entitled to impose tariffs on $7.5 billion of exports from the European Union.

Hours after the ruling, the Trump administration said it would impose a first round of tariffs on European aircraft, French wine and cheese, and other goods starting Oct 18.

Before the Trump administration announced it was imposing new tariffs, Cecilia Malmstrom, European commissioner for trade, said in a statement, "If the US decides to impose WTO authorized countermeasures, it will be pushing the EU into a situation where we will have no other option than do the same."

The US has a list of European goods valued at $21 billion for possible tariffs, and the EU has countered with a list of $20 billion of US exports it could selectively target.

Washington has indicated that some tariffs could hit 100 percent of the value of key imported goods.

The tariffs also could hit parts that US airlines use in commercial jets. In 2018, US President Donald Trump imposed tariffs on steel and aluminum imported from the EU. Next month, Trump is expected to decide whether to impose tariffs on EU-made cars and auto parts.

The WTO ruling ends the first round of a 15-year battle over support payments for the world's largest aircraft builders, Airbus and Boeing.

After the US filed its case with the WTO, the EU filed a counterclaim alleging Boeing had received government contracts for defense and space projects as well as tax breaks. The WTO is expected to rule on the EU's claim in the first half of 2020.

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