U.S. and EU reach deal to end Airbus-Boeing trade dispute

June 16, 2021: The United States and the European Union reached a deal Tuesday to end a damaging dispute over subsidies to rival plane makers Boeing and Airbus and phase out billions of dollars in punitive tariffs, the U.S. trade envoy said.

US Trade Representative Katherine Tai said the two sides had agreed on a five-year agreement to suspend tariffs at the center of the dispute. She said if US companies could not compete “fairly” with them in Europe, they could be re-implemented. “Today’s announcement addresses a long-standing impasse in US-EU relations,” Tai said as President Joe Biden met with EU leaders in Brussels. “Instead of fighting a close ally, we are finally coming together against a common threat.”

The dispute saw tit-for-tat duties slapped on a range of companies that have nothing to do with aircraft production, from French winemakers to German cookie bakers in Europe and U.S. spirits producers in the United States, among many others.

Following the WTO’s decision that the European Union provided illegal subsidies to Boeing, the European Union retaliated last November with billion 4 billion in fines. In March, weeks after Biden took office, the two sides agreed to suspend tariffs.

The U.S. imposed $7.5 billion in tariffs on European exports in 2019 after the World Trade Organization ruled that the EU had not complied with its rulings on subsidies for Airbus, which is based in France. The EU retaliated last November with $4 billion in punitive duties after the WTO ruled that the U.S. had provided illegal subsidies to Boeing.

In March, weeks after Biden had taken office, the two sides agreed to suspend the tariffs.

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