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EU proposes six-month tariff freeze with US

Brussels seeks compromise in 16-year-old dispute over aircraft subsidies

- Reuters Berlin

The EU has suggested that it and the US suspend tariffs imposed on billions of dollars of imports for six months, EU trade chief Valdis Dombrovski­s was quoted as telling Germany’s Der Spiegel on Saturday.

That would go beyond a fourmonth suspension agreed to last month, and send a signal that Brussels is seeking compromise in a 16-year-old dispute over aircraft subsidies.

The dispute

about

airplane subsidies is one of two ongoing trade fights with Europe. Former US President Donald Trump in 2018 imposed a tariff on steel and aluminum imports, using an obscure provision of US code that allows him to do so on issues of national security.

European leaders, whose manufactur­ing industry was hit hard by the measures, decried the reasoning because most of them are longtime US allies. The EU imposed a retaliator­y set of tariffs that same year.

The two sides exchanged proposals for a solution but disagreeme­nts over ensuring future compliance and aid repayment derailed efforts. The US offered a truce on Oct. 14, 2020 if Airbus agreed to repay state loans at a level of interest assuming a 50 percent product failure rate; however, the EU declined and decided to move forward with tariffs.

“We have proposed suspending all mutual tariffs for six months in order to reach a negotiated solution,” Dombrovski­s told the news magazine.

“This would create a necessary breathing space for industries and workers on both sides of the Atlantic,” he added.

In March, the two sides agreed on a four-month suspension covering all US tariffs on $7.5 billion of EU imports and all EU duties on $4 billion of US products, which resulted from long-running World Trade Organizati­on cases over subsidies for planemaker­s Airbus and Boeing.

Dombrovski­s also said the EU would closely monitor US President Joe Biden's “Buy American” laws which provide for US public contracts to be awarded exclusivel­y to American firms.

“Our goal is to push for procuremen­t markets that are as open as possible all over the world,” he told Der Spiegel.

 ?? AFP ?? In March, the two sides agreed on a four-month suspension covering all US tariffs on $7.5 billion of EU imports and all EU duties on $4 billion of US products.
AFP In March, the two sides agreed on a four-month suspension covering all US tariffs on $7.5 billion of EU imports and all EU duties on $4 billion of US products.

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