The United States and the European Union reached a deal on Tuesday to end a damaging dispute over subsidies to rival aircraft makers Boeing and Airbus and phase out billions of dollars in punitive tariffs, the US envoy said. Trade.
U.S. Trade Representative Katherine Tai said the two sides reached a five-year deal to suspend tariffs at the center of the dispute. She said they could be reapplied if US companies are unable to “compete fairly” with those in Europe.
“Today’s announcement resolves a long-standing irritant in US-EU relations,” Tai said as President Joe Biden met with EU leaders in Brussels. “Instead of fighting with one of our closest allies, we are finally coming together against a common threat.”
The dispute has seen the imposition of tariffs on a range of businesses unrelated to aircraft production, from French winegrowers to German bakers in Europe and American spirits producers in the United States, among others.
The United States imposed tariffs of $ 7.5 billion on European exports in 2019 after the World Trade Organization ruled that the EU failed to comply with its rulings on EU subsidies. Airbus, based in France. The EU hit back last November with $ 4 billion in punitive tariffs after the WTO ruled that the United States had provided illegal subsidies to Boeing.
Which companies could benefit
In March, weeks after Biden took office, the two sides agreed to suspend tariffs.
“US tariffs hit a range of EU products including food, drink / wine, machinery as well as airplanes and aircraft parts,” Height Securities Benjamin Salisbury told investors in a memo . “Meanwhile, EU tariffs hit Boeing jets as well as industrial and agricultural products – including fish, cheese, spirits, tractors – from the United States.”
A range of large US companies are expected to benefit from the tariff suspension, including Caterpillar, Constellation Brands, The Hershey Company, John Deere, Kraft Heinz and Ocean Spray, he said.
“This really opens a new chapter in our relationship as we move from litigation to cooperation on airplanes – after 17 years of dispute,” said European Commission President Ursula von der Leyen. “This is the longest trade dispute in the history of the WTO.
The breakthrough leaves yet other trade frictions between the US and the EU unresolved. Most notably, the import taxes that President Donald Trump imposed on European steel and aluminum three years ago have been left in place by President Joe Biden. It is not yet clear whether progress on this thorny issue can be resolved quickly.