After years of court disputes, the United States and the European Union reached an agreement on Tuesday to end the disagreement over illegal subsidies to Boeing and Airbus and both the US government and the EU will phase out billions of dollars in punitive tariffs.
US Trade Representative, Katherine Tai, said that the two sides reached consensus on a five-year agreement to suspend tariffs at the center of the dispute. She added that this could be re-implemented if US companies cannot «compete fairly» with those in Europe.
«Today’s announcement resolves a long-standing point of conflict in the relationship between the United States and the EU,» Tai said as the President Joe Biden met with EU leaders in Brussels. «Instead of fighting with one of our closest allies, we are finally uniting against a common threat.»
«This really opens a new chapter in our relationship as we moved from litigation to cooperation in aircraft, after 17 years of disputes,» said European Commission President Ursula von der Leyen.
The United States imposed what could have amounted to 7.5 billion dollars in tariffs on European exports in 2019 after the World Trade Organization (WTO) ruled that the EU had failed to comply with its rulings on subsidies for Airbus, which is based in France. The EU retaliated last November with up to 4 billion in punitive tariffs after the WTO ruled that the United States had given Boeing illegal subsidies.
On March 11, weeks after Biden took office, the two parties agreed to suspend rates for four months, so the new agreement will automatically take effect on July 11.
The trade dispute escalated during the Trump presidency, impacting on a variety of companies that have nothing to do with aircraft production, from French winemakers to German cookie bakers in Europe to American spirits producers in the United States.
