Biden and the EU END 17-year trade dispute over Boeing and Airbus tariffs

The United States and the European Union reached a deal Tuesday to end a damaging dispute over subsidies to rival plane makers Boeing and Airbus and phase out billions of dollars in punitive tariffs, the U.S. trade envoy said.

U.S. Trade Representative Katherine Tai said the two sides have come to terms on a five-year agreement to suspend the tariffs at the center of the dispute. She said they could be reimplemented if the U.S. companies are not 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 President Joe 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 dispute 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.

A line of Boeing 777X jets are parked nose to tail on an unused runway at Paine Field, near Boeing’s massive production facility in Everett, Wash

‘I´m very positive and convinced that together we will deliver today,’ European Commission President Ursula von der Leyen told reporters Tuesday, hours before a meeting in Brussels with President Joe Biden.

The U.S. imposed $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 $4 billion in punitive duties after the WTO ruled that the U.S. had provided illegal subsidies to Boeing.

In March, weeks after Biden had taken office, the two sides agreed to suspend the tariffs.

The 17 year trade dispute was the longest and most costly in the history of the World Trade Organization