EU, US set to unveil truce in 17-year aircraft battle

  • EU, US set to unveil truce in 17-year aircraft battle

EU, US set to unveil truce in 17-year aircraft battle

USA officials confirmed on Tuesday they struck a truce to end the dispute over government subsidies for the world's leading commercial plane makers during a summit in Brussels.

"We look forward to continuing discussions on the long-standing Large Civil Aircraft dispute during Katherine Tai's visit to the United Kingdom on Wednesday, and achieving a fair and balanced settlement that works for the whole of the United Kingdom".

President Joe Biden said he had "very different views than my predecessor" following the deal, adding it was "overwhelmingly in the interest" of the USA to have strong relations with the EU.

But he had also said he wanted to restore good ties with traditional allies, including the countries of the European Union, after they came under strain with former president Donald Trump's "America First" approach to trade and foreign policy.

Under the Airbus-Boeing deal, all future passenger aircraft will be required to be developed without subsidies, the officials said.

Brussels and Washington have said they would seek to address excess global capacity largely centred in China.

European Commission president Ursula von der Leyen said: "We have taken a major step in resolving the longest trade dispute in the history of the WTO". "Today we have delivered".

Airbus shares ticked up 0.4% in Paris on Tuesday afternoon, while Boeing's stock was up 0.7% as markets opened in the US. Chicago-based Boeing shares were up 0.7% ahead of regular United States trading. But they argue that Washington also grants indirect aid to Boeing under secret defense contracts.

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.

As a result, European Union and USA businesses have had to pay over US$3.3 billion in duties.

These tariffs were initially suspended by both sides for a four-month period back in March.

"We have committed to meaningful cooperation", she said.

Airbus has likely reimbursed or moved to commercial rates all launch-related financing that was deemed illegal, and any further adaptations required are likely to be immaterial, said Sandy Morris, an analyst with Jefferies in London.

The EU and USA will also commit at the summit to remove tariffs related to a steel and aluminium dispute, according to a draft of the meeting's conclusions. That move enraged European countries, majority North Atlantic Treaty Organisation allies, because it was justified as a measure to protect US national security.

The European Commission, which oversees EU trade policy, last month suspended for up to six months a threatened June 1 doubling of retaliatory tariffs on Harley-Davidson motorbikes, USA whiskey and motorboats, and refrained from slapping tariffs on more U.S. products from lipstick to sports shoes.