William Malcolm

EU, US Reach Deal To End Airbus-Boeing Trade Dispute

The European Union and the United States have agreed to end a protracted dispute over subsidizing the production of Airbus and Boeing aircraft. This was stated by the President of the European Commission (EC) Ursula von der Leyen after the meeting with the American President Joe Biden. After negotiations, the White House confirmed that tariffs will be abolished for five years. The two sides also want to work together to counter China’s market-threatening practices. On the contrary, politicians failed to resolve the issue of US tariffs on European steel and aluminum imports at the summit.

“This negotiation began with a breakthrough in aircraft. This opens a new chapter in our relationship because in aircraft production we move from dispute to cooperation. After 17 years of disputes,” von der Leyen said.

According to Bloomberg sources, the European Commission spent the night negotiating with the bloc’s member states to finalize the agreement before today’s meeting.

The EU and the US have accused each other since 2004 at the World Trade Organization (WTO) of illegally supporting their aircraft manufacturers Airbus and Boeing. Both parties were found to have financially supported their producers in breach of WTO rules to secure a more favorable market position.

In 2019, the United States imposed $ 7.5 billion (over CZK 157 billion) in tariffs on European goods in retaliation for state aid to European aircraft manufacturer Airbus. Last year, due to subsidies for Boeing, the EU introduced tariffs on US goods worth four billion dollars (84 billion CZK) per year. However, in March this year, both sides agreed to suspend the collection of these duties until July, to settle the dispute.

According to a statement from the Biden office, both parties have agreed today that they will not collect duties for five years. However, the agreement leaves room for their reintroduction. At the same time, Washington and Brussels want to take joint action against non-market Chinese practices, which Biden called a significant step.

On the other hand, there was no breakthrough in the issue of tariffs on imports of metals from the EU, which was introduced in 2018 by Biden’s predecessor Donald Trump. According to von der Leyen, Biden said that the union was not a security threat to the United States, which was Trump’s argument for introducing customs duties, but he did not commit himself to abolish customs duties.

“I’m sure we’ll find a solution,” von der Leyen said after the meeting. According to her, the space for action is given by the EU postponement of the introduction of further countermeasures, thanks to which both parties can look for an agreement until the end of the year.

The EU wants to strengthen cooperation with the US in general and in the introduction of new technological standards, said the head of the EU executive, von der Leyen. The leaders, therefore, agreed at the summit to create a business and technology council to discuss issues of artificial intelligence, clean climate technologies, and the supply of critical materials such as semiconductors.