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The agreement reached by the United States and the European Union on Tuesday ends the long-standing dispute over subsidies between Boeing and Airbus, which means that billions of dollars of punitive tariffs will be gradually eliminated. This will ease transatlantic tensions and allow both parties to focus on a common economic threat: China.
However, this breakthrough has left other trade frictions between the United States and the European Union unresolved. Most prominently, the import tax imposed by then-President Donald Trump on European steel and aluminum three years ago was retained by President Joe Biden. It is not clear whether the progress of this thorny issue can be resolved soon.
But in the dispute between Boeing and Airbus, U.S. Trade Representative Catherine Tay stated that the two sides have reached an agreement on a five-year agreement to suspend the collection of tariffs at the center of the conflict. However, Tai warned that if American companies cannot “fairly compete” with European companies, they may re-impose tariffs.
When meeting with EU leaders in Brussels, Biden said: “Today’s statement resolves the long-standing problems in US-EU relations.” “Instead of fighting one of our closest allies, we are finally united in response to a common threat.”
The deal brings new international goodwill to Biden, as he will hold a possibly tricky summit with Russian President Vladimir Putin on Wednesday. This is also good news for the aviation industry that has been disrupted by coronavirus travel restrictions.
Trade disputes have risen sharply under the leadership of the Trump administration, imposing tit-for-tat tariffs on a series of companies unrelated to aircraft production. From a French winemaker German biscuit bakers and American spirits producer In the United States, wait.
After the World Trade Organization ruled that the European Union had not complied with its subsidy ruling on France-based Airbus, the United States imposed tariffs of up to 7.5 billion U.S. dollars on European exports in 2019. In November last year, after the WTO ruled that the United States provided illegal subsidies to Seattle-based Boeing, the European Union retaliated with punitive tariffs of up to 4 billion U.S. dollars.
Temporarily ease
In March of this year, just a few weeks after Biden took office, the two sides agreed to suspend tariffs. The suspension began on March 11 and lasted for four months. The new agreement will come into effect on July 11.
European Commission President Ursula von der Lein said: “This really opens a new chapter in our relationship as we shift from litigation to aircraft cooperation-after 17 years of disputes.” “This is the longest trade in the history of the WTO. dispute.”
According to the EU administration, the two parties stated that they will also jointly analyze and resolve “third-party non-market behaviors that may harm our large civil aircraft industry.”
Dai said that they will cooperate “to challenge and counter China’s non-market practices in this field in a specific way that reflects our standards of fair competition.”
Airbus, which is headquartered in France but has centers in Germany and Spain, welcomed the agreement.
An Airbus spokesperson said: “This will lay the foundation for the level playing field that we have been advocating since the beginning of this dispute. It will also avoid lose-lose tariffs, which will only increase many of the challenges facing our industry.” In a statement.
The French Minister of Finance and the Minister of European Affairs also welcomed the agreement.
They said: “We will now be able to focus on finally eliminating these differences and determining the conditions of fair competition on a global scale to support the aerospace industry, which is of strategic importance to both Europe and the United States.” In the joint statement.
German Economy Minister Peter Altmeier described it as “an important signal of transatlantic cooperation and a new beginning of transatlantic relations.”
“We need fewer tariffs, not more tariffs, because tariffs will eventually cause harm to both sides of the Atlantic,” Altmaier said in a statement. “Today’s agreement first breathes a sigh of relief for German exporters who have been imposed special tariffs.”
More problems still exist
Despite the breakthrough, the agreement did not end the Trump-era transatlantic trade dispute. The former US president also imposed tariffs on EU steel and aluminum. This has angered European countries, most of which are NATO allies, because it is a measure to protect the national security of the United States.
The so-called Section 232 procedure both hurt European producers and increased steel costs for American companies. The European Union retaliated by increasing tariffs on American-made motorcycles, bourbon whiskey, peanut butter and jeans.
But von der Lein said that in order to ensure the progress of Airbus-Boeing, the EU agreed to postpone the implementation of a series of steel and aluminum-related countermeasures before the summit for six months. She expressed cautious optimism that by the end of this year, an agreement can also be reached here.
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