The World Trade Organisation (WTO) has ruled that the European Union paid billions of dollars in illegal subsidies to Airbus.
The US Trade Representative said the ruling opens the way for placing tariffs on EU goods.
The WTO dismissed an appeal by Airbus saying, the European plane maker had failed to fix the harm done to Boeing.
Boeing argued that European countries had given $18bn in state aid to Airbus to help launch its A380 and A350 jets.
Airbus has a similar case against Boeing awaiting a ruling from the WTO. The accusations, rulings and appeals have been going on for 14 years.
Boeing chairman and chief executive Dennis Muilenburg said: “Today’s final ruling sends a clear message: disregard for the rules and illegal subsidies are not tolerated,”
US Trade Representative Robert Lighthizer said: “It is long past time for the EU to end these subsidies.
“Unless the EU finally takes action to stop breaking the rules and harming U.S. interests, the United States will have to move forward with countermeasures on EU products.”
During the 1990s the EU and the US followed agreed rules on subsidising aircraft makers until the US pulled out of the deal and both sides filed complaints against each other in 2004.
The ruling is now likely to give the US greater leverage as it negotiates with the EU over steel and aluminium tariffs.
Source: BBC News