The long-running battle over billions of dollars in state subsidies to Airbus Group SE and Boeing Co. intensified on Thursday when the World Trade Organization ruled that European governments had failed to end unfair funding to the European plane maker.

The ruling moves the U.S. one step closer to being able to impose more than $5 billion in annual tariffs against goods and services from the European Union as soon as next year, according to U.S.

The...