Massive financial support by the US state of Washington to get Boeing to build its 777X aircraft in Seattle has been ruled legal.
An appeal against an earlier World Trade Organisation ruling has been successful, allowing at least $1 billion of state tax incentives given to the US manufacturer.
The decision is the latest twist in a decades-long battle between Boeing and European rival Airbus over state subsidies, which is being adjudicated in a series of cases by the WTO.
Airbus claims the US state has provided Boeing with tax breaks worth almost $9 billion and which were sufficient to shut out imports.
In a statement on the appeal by the Office of the US Trade Representative, Boeing said: “The ruling confirms that the tax treatment Boeing and others are receiving in Washington is not a prohibited subsidy.”
Boeing has long argued that Airbus exists only because of subsidies and investments by European states.
Airbus has highlighted subsidies that Boeing receives in the US.
In a statement on the 777X ruling, Airbus claimed that Boeing subsidies had cost it $100 billion in lost sales, The Times reported.
Brussels and Washington have two larger cases pending at the WTO, centred on multiple claims and counter-claims about illegal subsidies for their respective aviation industries.