The U.S. and the European Union agreed to end their 17-year dispute over aircraft subsidies to Airbus SE and Boeing Co. that saw the allies impose tariffs on $11.5 billion of each other’s exports, EU officials said.
The European Commission spent Monday night discussing the accord with member states to get the deal over the line before an EU-U.S. summit in Brussels with President Joe Biden, according to officials familiar with the deliberations.
The landmark accord turns the page on a key conflict in former President Donald Trump’s trade war and sets the stage for a new era of transatlantic cooperation over state aid at a time when China is vying to displace the Boeing-Airbus civil aircraft duopoly.
The agreement was driven, in part, by a growing awareness among policy makers in Brussels and Washington that China’s state-sponsored aerospace manufacturer Commercial Aircraft Corp. of China, or Comac, is on track to become a legitimate rival in global planemaking by the end of the decade.
Airbus shares rose 1% as of 9:01 a.m. in Paris, bringing the gain this year to 26%. Boeing, which is up 15% year-to-date, was little changed ahead of the U.S. market open.
Steel, Aluminum
In 2019, the World Trade Organization authorized the U.S. to level tariffs against $7.5 billion of EU exports annually over government support for Airbus, while the EU won permission to hit back with levies on $4 billion of U.S. goods.
The levies were suspended by both sides in March as negotiators worked toward an agreement. They cover items ranging from airplanes and parts to tractors, wine and cheese. The U.K. unilaterally suspended its tariffs with the U.S. in December as it broke from the EU.
The EU and U.S. will also commit at the summit remove tariffs related to a steel and aluminum dispute, according to a draft of the meeting’s conclusions. In 2018, the U.S. imposed levies on metals exports from Europe on national-security grounds.
This one is trickier and there has been back and forth over the exact language in the drafts of the joint communique, but both sides seem to agree on pushing for a deadline by the end of the year, said the officials, who asked not to be identified because the talks are private.
The EU retaliated against the U.S. steel and aluminum measures by targeting 2.8 billion euros ($3.4 billion) of American imports with tariffs on a range of big-brand products, including Harley-Davidson Inc. motorcycles, Levi Strauss & Co. jeans and bourbon whiskey.
