US, EU agree on truce to resolve 17-year Boeing-Airbus trade dispute

The United States and the European Union have agreed on a long-term truce aimed at ending a 17-year Airbus-Boeing dispute.

The truce agreement was reached during a summit between US President Joe Biden, European Council President Charles Michel and European Commission President Ursula von der Leyen in Brussels on Tuesday.

The truce would last for at least five years to leave enough time for resolving trade disputes, and would see the removal of tariffs on over 11 billion dollars of goods.

The giant airplane manufacturers Airbus and Boeing welcomed the truce agreement, with the former saying it would "provide the basis to create a level-playing field which we have advocated for since the start of this dispute.”

Moreover, Von der Leyen hailed the summit as a "breakthrough" in a feud that became one of the longest in World Trade Organization history.

“This meeting has started with a breakthrough on aircraft,” the European Commission president said. “This really opens a new chapter in our relationship because we move from litigation to cooperation on aircraft — after 17 years of dispute.”

A senior US administration official also described the agreement as an important initiative that would serve as a platform for cooperation for years ahead.

"The notion here is that the United States and Europe laid the foundation for the world economy after World War II and now have to work together to write the rules of the road for the next generation," the official said.

US says won't lift tariffs on Airbus aircraft, European products

The US government says it would maintain 15% tariffs on Airbus aircraft and 25% tariffs on other European goods.

US trade representative Katherine Tai said during a videocall that, “Today’s announcement resolves a longstanding trade irritant in the US-Europe relationship.”

Both sides “now have time and space to find a lasting solution through our new Working Group on Aircraft, while saving billions of euros in duties for importers on both sides of the Atlantic,” she added.

Tai said the tariffs on EU products would be suspended as long as government support for Airbus meets the agreement terms.

“Should EU support cross a red line and US 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,” she said.

The US administration under former President Donald Trump decided in 2018 to impose a 25% tariff on European steel and a 10% duty on European aluminum on the grounds of national security, something the EU vehemently opposed and retaliated against.

In response, a first round of tariffs worth 2.8 billion euros was implemented by the EU and another round worth 3.6 billion euros was due to kick this month before Biden and Von der Leyen suspended the retaliatory levies in May.

Washington and Brussels have said they are trying to clear the slate of trade disputes to consolidate a more friendly phase and jointly tackle other issues, including China and Russia.

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