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Part 2 of 2

More importantly, the long-awaited ruling marks a milestone in the WTO’s longest-running dispute that will further test transatlantic relations which have deteriorated under Trump’s “America First” approach to international ties, with tariffs now virtually assured. It’s also an example of Trump getting a favorable ruling from an organization he has threatened to pull out of.

The development is terrible news for Europe, which is effectively already in a recession with European manufacturing contracting sharply as a result of the ongoing U.S. trade war with China; any wider flareup of tit-for-tat tariffs with Europe will further threaten the global economy and accelerate Europe's contraction.

Not coincidentally, just one day earlier, on Tuesday, the WTO cut its own trade growth forecast for this year to the weakest level in a decade, warning against a “destructive cycle of recrimination", a cycle which it itself ironic stoked just one day later.

As Bloomberg adds, the Trump administration is considering a "particularly damaging" trade weapon known as “carousel” retaliation, which would enable the U.S. to regularly shift around the targeted goods, people familiar with the deliberations said last month. That would increase trade uncertainty and pain for European businesses.

Meanwhile, the EU warned it would retaliate immediately against against any Airbus-linked tariffs when the WTO rules early next year on the bloc’s dispute over U.S. subsidies to Boeing Co., according to European Trade Commissioner Cecilia Malmstrom.

“The mutual imposition of countermeasures, however, would only inflict damage on businesses and citizens on both sides of the Atlantic, and harm global trade and the broader aviation industry at a sensitive time,” Malmstrom said, adding that the bloc is ready to work with the U.S. on a “fair and balanced solution for our respective aircraft industries."

Ironically, as Boeing suffers over the indefinite grounding of its 737 MAX planes, the latest twist could further impact the US aerospace industry: Airbus warned in a statement that tariffs on its aircraft and components would come as a blow to the U.S. aerospace industry, with some 40% of its procurement coming from American suppliers.