EU and U.S. agree to suspend all tariffs linked to the Airbus and Boeing disputes

The EU and U.S. agreed today to suspend all retaliatory tariffs on EU and U.S. exports imposed in the Airbus and Boeing disputes for a four-month period.

The suspension allows both sides to focus on resolving this long-running dispute and it provides as well an important boost to EU exporters, since the U.S. had been authorized to raise tariffs on $7.5 billion of EU exports to the U.S.

Similarly, EU tariffs will be suspended on some $4 billion worth of U.S. exports into the EU.

“This is a significant step forward. It marks a reset in our relationship with our biggest and economically most important partner. Removing these tariffs is a win-win for both sides, at a time when the pandemic is hurting our workers and our economies. This suspension will help restore confidence and trust, and therefore give us the space to come to a comprehensive and long-lasting negotiated solution. A positive EU-U.S. trade relationship is important not only to the two sides but to global trade at large.”, said the Trade Commissioner Valdis Dombrovskis.

Background

In 2018, the Appellate Body found that the EU and its Member States had not fully complied with the previous WTO rulings with regard to EU subsidies to aircraft maker Airbus.

In March 2019, the Appellate Body confirmed that the U.S. had not taken appropriate action to comply with WTO rules on subsidies to aircraft maker Boeing.

In October 2019 the WTO authorized the U.S. to take countermeasures against European exports worth up to $7.5 billion, and the U.S. imposed these tariffs on 18 October 2019. The EU Member States concerned have taken in the meantime all necessary steps to ensure full compliance.

In October 2020, the WTO authorized the EU to take similar countermeasures on $4 billion of U.S. exports to the EU against illegal U.S. subsidies to aircraft maker Boeing.

The U.S. at that time was not ready to accept a negotiated settlement including an immediate removal of the U.S. tariffs. That is why the EU decided on 9 November 2020 to impose its countermeasures.

Further information:

Press release-European Commission