The World Trade Organisation has ruled that a tax break from Washington state to help Boeing develop its new 777X jetliner was a prohibited subsidy.
This comes as a setback for the US planemaker as it eyes victory in a parallel case against Airbus.
The WTO said the subsidy came in the form of a renewed cut in Washington state's main business tax for aerospace agreed in 2013, when Boeing was considering where to base assembly of the latest member of its long-haul jet family.
It rejected a complaint by the European Union against six further tax measures.
It is the third swathe of public support for Boeing or its European rival Airbus criticised by the WTO in a record transatlantic trade dispute dating back 12 years, and involving mutual accusations of tens of billions of dollars of aid.
The ruling, which can be appealed by either side, comes as the US ponders potential sanctions against the EU over earlier rulings against Airbus.
The WTO did not give a value for the banned aid, but the European Union estimated it at $5.7 billion out of an $8.7 billion package of tax measures in Washington, where most of Boeing's factories are based.
Airbus said the measures had cost it $50 billion in sales.
Boeing said the aid in question would only kick in from 2020 and would be worth $50m a year, a fraction of the total amount at stake in the world's largest trade dispute.
On paper, the latest ruling is a step backwards for the US because the WTO had earlier ruled a previous generation of tax breaks had fallen into a weaker category of subsidies, which the Geneva watchdog treats less harshly than "prohibited" aid.
Under WTO rules, subsidies that are explicitly tied to exports or, in this case, the use of local content are prohibited and must be withdrawn "without delay".
The two sides are certain to clash over whether that means actual repayment.
"I continue to think that the only way out of the ridiculous series of disputes initiated by the US is to agree on a set of globally applicable rules for the support of the civil aircraft industry, which would benefit both sides of the Atlantic," Airbus Group Chief Executive Tom Enders said in a statement.
In a separate statement, the EU Commission called on the United States to withdraw a prohibited tax break for the new 777X jetliner following the WTO ruling.
"The panel has found that the additional massive subsidies of $5.7 billion provided by Washington state to Boeing are strictly illegal," EU Trade Commissioner Cecilia Malmstrom said.
"We expect the US to respect the rules, uphold fair competition and withdraw these subsidies without any delay."
Boeing officials and lawyers played down thprospect of having to pay back any support, noting there was no money to discuss until deliveries of the new jet start in 2020.
They said they were confident the ruling would be overturned on appeal and insisted the tax breaks were dwarfed by $22 billion in subsidised loans by European governments to Airbus ,adding these could spark US retaliation within a year.
