Washington state lawmakers moved on Wednesday to remove a key tax break for Boeing Co. and other aerospace firms in a bid to head off possible European tariffs on U.S. goods and ease a transatlantic trade dispute over aircraft subsidies.

The United States last week toughened its own tariffs on aircraft built by Boeing's arch-rival, Europe's Airbus, after winning approval last year from the World Trade Organization to penalize European goods over Airbus subsidies.

The European Union is widely expected to win approval to use a similar trade weapon to penalize imports of U.S. goods when a parallel case over U.S. support for Boeing comes to a head during the spring.