Signals “restart”, EU and US cancel tariffs due to Airbus-Boeing dispute

A first phone call on Friday made the first trade breakthrough to begin rebuilding transatlantic relations between the United States and the European Union in the wake of the Trump presidency.

After US President Joe Biden and European Commission President Ursula von der Leyen spoke, both sides decided to suspend the tariffs used in the long-running Airbus-Boeing dispute over the next four months.

Von der Leyen said that “as a symbol of this new start, President Biden and I agreed to suspend all our tariffs introduced in the context of Airbus-Boeing’s disputes, both on aircraft and non-aircraft products, for an initial period of 4 months. “

It hardly covered all the outstanding issues that were handed over to more and more during the four-year presidency of former President Donald Trump, but the EU was happy to take what it could get from the first personal exchange between the two.

Von der Leyen called it “a very positive signal for our economic cooperation in the coming years.”

“This is excellent news for businesses and industries on both sides of the Atlantic,” she said.

With the initiative to facilitate the air war that has long weighed on trade relations, the 27-nation bloc is trying to revive the spirit of cooperation between Washington and Europe that has long defined global diplomacy.

Von der Leyen hopes that this is the first indication that both the United States and Europe will stand shoulder to shoulder as they have so often in the last century to meet global challenges.

Von der Leyen said she invited Biden to a global health summit in Rome on May 21 to step up the fight against COVID-19, the common enemy that has killed more than a million people in the EU and the United States. She hoped it would also include foreign policy issues, where both could work better together to meet China’s growing power.

On Friday, however, it was the trade that mattered and the shutdown will provide a four-month window to address the more fundamental issues. In the aircraft dispute, the US had to impose customs duties of 7.5 billion dollars on EU exports to the US and as a result of the deal, EU tariffs will be suspended at 4 billion US exports.

The customs closure will affect everyone, from French wine producers to German cake bakeries in Europe and American spirits among many others.

“Raising this tariff burden will support the recovery of restaurants, bars and small craft distilleries across the country that were forced to close their stores during the pandemic,” the U.S. Distilled Spirits Council said.

Some trade hostilities linger

Not that both sides can now drink until trade hostility ceases.

Still outstanding, for example, are the tariffs that Trump imposed on EU steel and aluminum, which angered Europeans and other allies by calling their metals a threat to US national security. The so-called Article 232 procedure harms both European producers and increases steel costs for American companies. Europe took back by raising tariffs on US-made motorcycles, bourbon, peanut butter and jeans.

And Friday’s soft phone calls have not dampened Europe’s pursuit of digital taxes on US technology bodies such as Google and Amazon.

However, the breakthrough in the aviation conflict, which enters its 17th year, should not be underestimated.

Only in November last year did the EU impose tariffs of up to $ 4 billion on US goods and services due to illegal support to aircraft manufacturer Boeing, even though the 27 EU countries were already improving hopes under Biden.

The move came just weeks after international arbitrators gave the EU the green light for such a sanction. The World Trade Organization had illegally assessed some US support for Boeing – which is a bitter rival to Europe’s Airbus – and said the EU could compensate it with a limited number of sanctions on US trade.

The WTO had ruled that Boeing gained an unfair advantage over Airbus through tax breaks from the state of Washington, where Boeing once had its headquarters. However, following the WTO decision, the state repealed the tax breaks, which made EU complaints obsolete in the opinion of US officials.


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