US, EU suspend tariffs in Boeing-Airbus dispute | Aviation News

A first phone call on Friday enabled 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, the two sides decided to suspend the tariffs used in the long-standing Airbus-Boeing dispute for the next four months.

Von der Leyen said that “as a symbol of this fresh start, President Biden and I have agreed to suspend all of our tariffs imposed in Airbus-Boeing disputes, both on aeronautical and non-aeronautical products, for an initial period of four months.”

The discussion did little to cover all of the outstanding issues that were left to worsen increasingly under the four-year presidency of former President Donald Trump, but the EU gladly took whatever it wanted. could get from the first personal exchange between the Biden and von der Leyen.

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

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

With the initiative to ease the air struggle that has long weighed on trade relations, the European Union – a bloc of 27 countries whose executive is the European Commission – seeks to revive the spirit of cooperation between Washington and the Europe which has long defined world diplomacy. .

Von der Leyen hopes this is the first indication that the United States and Europe will stand side by side as they have so often done over the past century to face global challenges.

Von der Leyen said she invited Biden to a world health summit in Rome on May 21 to streamline the fight against COVID-19, the common enemy that has killed more than a million people in the world. EU and US combined. She hopes the commonality will also extend to foreign policy issues, where the two could better cooperate to deal with China’s rising power.

On Friday however, it was trade that mattered and the suspension will give a four month window to resolve the most fundamental issues. In the air dispute, the United States was allowed to impose tariffs on $ 7.5 billion of EU exports to the United States and, as a result of the deal, duties on EU customs will be suspended on $ 4 billion in US exports.

The tariff suspension will affect everyone from French winemakers to German bakers in Europe and American spirits producers, among others.

“The lifting of this tariff burden will support the recovery of restaurants, bars and small craft distilleries across the country that were forced to shut down their businesses during the pandemic,” the United States Distilled Spirits Council said.

Not that both sides can now drink at the end of trade hostilities.

The tariffs Trump imposed on EU steel and aluminum are still pending, for example, which enraged Europeans and other allies by calling their metals a threat to the national security of states- United. The so-called Article 232 procedure harms both European producers and increases the cost of steel for American companies. Europe retaliated by increasing tariffs on motorcycles, bourbon, peanut butter and jeans made in the United States.

And Friday’s soft phone call didn’t dampen pressure from Europe for digital taxes on US tech giants like Google and Amazon.

The breakthrough in the aviation dispute, which is entering its 17th year, should not be underestimated, however.

Last November alone, the EU imposed tariffs on up to $ 4 billion in US goods and services over illegal aid to aircraft maker Boeing, even though the 27 EU countries were already hoping relations would improve under Biden.

The move came just weeks after international referees gave the EU the green light for such punitive action. The World Trade Organization (WTO) had ruled illegal US support for Boeing – which is a bitter rival to the European Airbus – and said the EU could compensate for that with a limited number of sanctions on US trade.

The WTO had ruled that Boeing had an unfair advantage over Airbus through tax breaks in Washington state, where Boeing was once headquartered. But after the WTO ruling, the state repealed the tax breaks, rendering the EU’s complaint obsolete in the eyes of US officials.

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