The US has been given the go-ahead to impose tariffs on $7.5bn worth of goods it imports from the European Union.
It is the latest chapter in the 15-year battle over subsidies for Airbus and its American rival Boeing, and sparked warnings about the impact on jobs.
It could mean tariffs on goods ranging from aircraft to shellfish are imposed.
The European Commission (EC) said the tariffs would be short-sighted and counterproductive.
The decision was made by the World Trade Organization (WTO) which handles trade disputes.
It has reduced the size of the tariffs that the US had hoped to impose from $11bn.
The commission said the two sides should try to reach a settlement.
“But if the US decides to impose WTO authorised countermeasures, it will be pushing the EU into a situation where we will have no other option than do the same,” the commission said.
Airbus chief executive Guillaume Faury also called for a resolution. He said it would be a “a barrier against free trade and would have a negative impact on not only the US airlines but also US jobs, suppliers, and air travellers”.
Airbus said close to 40% of Airbus’ aircraft-related procurement comes from US aerospace suppliers, which it said it supports 275,000 American jobs in 40 states.