Airbus-Boeing trade deal leaves other US-EU rifts

They include Trump’s import taxes on steel and aluminum that remain in place

BRUSSELS — The deal the United States and the European Union reached Tuesday to end their long-running dispute over subsidies to Boeing and Airbus will mean the phase-out of billions in punitive tariffs. It will ease trans-Atlantic tensions. And it will allow the two sides to focus on a common economic threat: China.

But the breakthrough leaves other trade frictions between the U.S. and the EU unresolved. Most prominently, the import taxes that President Donald Trump imposed on European steel and aluminum three years ago have been left in place by President Joe Biden.

But on the Boeing-Airbus dispute, U.S. Trade Representative Katherine Tai said the two sides have come to terms on a fiveyear agreement to suspend the tariffs at the center of the conflict. Tai cautioned, though, that the tariffs could be reimposed if U.S. companies aren’t able to “compete fairly” with those in Europe.

“Today’s announcement resolves a long-standing irritant in the U.S.-EU relationship,” Tai said, as Biden met with EU leaders in Brussels. “Instead of fighting with one of our closest allies, we are finally coming together against a common threat.”

The trade dispute skyrocketed under the Trump administration, and saw tit-for-tat duties slapped on a range of companies that have nothing to do with aircraft production, from French winemakers to German cookie bakers in Europe and U.S. spirits producers in the United States, among many others.

The U.S. imposed what could have amounted to $7.5 billion in tariffs on European exports in 2019 after the World Trade Organization ruled that the EU had not complied with its rulings on subsidies for Airbus, which is based in France. The EU retaliated last November with up to $4 billion in punitive duties after the WTO ruled that the U.S. had provided illegal subsidies to Seattle-based Boeing.

In March, weeks after Biden had taken office, the two sides agreed to suspend the tariffs for four months. The new agreement will officially go into effect on July 11.

“This really opens a new chapter in our relationship because we move from litigation to cooperation on aircraft — after 17 years of dispute,” said European Commission President Ursula von der Leyen.

Tai said they would cooperate “to challenge and counter China’s non-market practices in this sector in specific ways that reflect our standards for fair competition. “

Airbus, which is headquartered in France but also has centers in Germany and Spain, welcomed the agreement.

“This will provide the basis to create a level playing field which we have advocated for since the start of this dispute,” an Airbus spokesperson said in a statement.

Despite the breakthrough, the deal does not end the Trump-era trans-Atlantic trade row. The former U.S. president also slapped duties on EU steel and aluminum. That enraged European countries, most of them NATO allies, because it was justified as a measure to protect U.S. national security. The EU retaliated by raising tariffs on products like U.S.-made motorcycles.