Reportedly, the U.S. and EU agreed to suspend tariffs for another five years related to Boeing (BA) and Airbus subsidies, as the Biden administration looks to target China’s practices in the aviation industry. The agreement was reached at a U.S.-EU summit meeting in Brussels following the G7 meeting. The U.K. is reportedly hoping to strike a similar agreement with the U.S. in the coming days.
“These tariffs will remain suspended, so long as EU support for Airbus is consistent with the terms of this agreement. Should EU support cross the red line, and U.S. producers are not able to compete fairly and on a level playing field, the United States retains the flexibility to reactivate the tariffs that are being suspended,” stated U.S. trade representative Katherine Tai during a media call.
The trade dispute began in 2004 over aircraft subsidies, but intensified during the Trump administration and moved out of the aviation sector and over into popular consumer goods. In 2019, the World Trade Organization ruled against the EU, saying its subsidies for Airbus were illegal. The U.S. put tariffs on $7.5 billion in European goods in response. In 2020, the EU planned to impose tariffs on $4 billion American goods, including orange juice, tobacco, and cheddar cheese, after the WTO ruled that the U.S. gave illegal subsidies to Boeing.
The agreement comes as President Biden turned Europe to focus on China’s growing economic influence while at the G7 and NATO summits.
“Instead of fighting with one of our closest allies, we are finally coming together against a common threat,” Tai said. “We agreed to work together to challenge and counter China’s non-market practices in this sector in specific ways that reflect our standards for fair competition.”
Dow 30 component Boeing (NYSE: BA) is the world’s largest aerospace company and leading manufacturer of commercial jetliners and defense, space, and security systems. To learn more about Boeing (BA) and to track its ongoing progress please visit the Vista Partners Boeing (BA) Coverage Page.
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