The US has been given the go-ahead to impose tariffs on $7.5bn (£6.1bn) worth of goods it imports from the European Union.
It is the latest chapter in the 15-year battle between the US and the EU over subsidies given to Airbus and its American rival Boeing.
It could mean tariffs on goods ranging from planes to shellfish are imposed.
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.