US, EU agree to halt tariffs on aircraft, eye China

The European Union and the United States agreed on Friday to suspend tariffs imposed on billions of dollars of imports in a 16-year-old dispute over aircraft subsidies, and said any long-term solution would need to address Chinese competition.

The two sides said in a joint statement that the four-month suspension will cover 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.

It will ease the burden on industry and workers and focus efforts on resolving the conflict, the statement said.

As well as effective support measures and enforcement, key elements of a resolution would include “addressing the trade distortive practices of and challenges posed by new entrants from non-market economies, such as China”, it said.

The suspension followed a telephone call between US President Joe Biden and European Commission president Ursula von der Leyen, officials said.

The White House said Biden had underscored his support for the EU and his commitment to revitalise the US-EU partnership, while Von der Leyen described the accord as excellent news for businesses on both sides of the Atlantic, and a very positive signal for economic cooperation in the years to come.

EU trade chief Valdis Dombrovskis hailed a reset in the EU’s relationship with its biggest and economically most important partner.—