Transatlantic tariffs over Airbus/Boeing subsidies lifted

In separate trade accords, the United States has agreed with the United Kingdom and the European Commission to reciprocally suspend all trade tariffs imposed as a result of a long-lasting spat over subsidies to Airbus and Boeing. The UK ceased to apply its own retaliatory tariffs on American products on January 1, 2021, when it finalised its exit from the European Union. Since the duties were imposed by the EU, the UK would not have had the legal standing to continue them even if it had chosen to do so. On March 4, London and Washington issued a joint statement in which the US announced it would suspend its tariffs on British goods for a period of four months. “This will allow time to focus on negotiating a balanced settlement to the disputes, and begin seriously addressing the challenges posed by new entrants to the civil aviation market from non-market economies, such as China,” the statement said. The day after, European Commission President Ursula von der Leyen and US President Joe Biden agreed to reciprocally suspend all tariffs related to the Airbus/Boeing row also for a period of four months. “We both committed to focus on resolving our aircraft disputes, based on the work of our respective trade representatives. This is excellent news for businesses and industries on both sides of the Atlantic, and a very positive signal for our economic cooperation in the years to come,” von der Leyen said. The US-EU dispute over subsidies to the two aircraft manufactures dates back to 2004. In 2019, the World Trade Organisation concluded its longest-ever investigation and authorised the US to impose tariffs on European exports worth EUR7.5 billion (USD8.94 billion) per year in retaliation for the illegal financial assistance which had helped Airbus compete with Boeing. However, in 2020, the WTO also authorised the EU to impose retaliatory tariffs on USD4 billion worth of annual American exports. While the disputes concern aircraft manufacturers, the tariffs affect a broad range of unrelated and often highly symbolic products, such as Scottish whisky, French wines, Italian cheeses, and American-made Harley motorcycles. The UK never imposed its own sanctions, as until the end of 2020 the country did not have a trade policy independent of Brussels. All involved governments are hoping that within the next four months, the spat will be settled on a more permanent basis.