The war is over: US and EU resolve dispute over Boeing and Airbus state subsidies

  • EU and US resolve 17-year-old issue of state subsidies for aircraft manufacturers.
  • The US previous administration levied duties worth $7.5 billion on European products.
  • The EU retaliated with tariffs worth $4 billion on US goods.

The United States and the European Union announced that they have managed to resolve the 17-year-old issue of state subsidies for aircraft manufacturers. Since 2004, the European Union has accused the US of providing illegal state subsidies to Boeing, while Washington claimed Brussels was illegally aiding Airbus SE.

EU and US have reached a settlement during the meeting between US President Joe Biden and the European Commission President Ursula von der Leyen at a US-EU summit in Brussels.

“This meeting has started with a breakthrough on aircraft; this really opens a new chapter in our relationship because we move from litigation to cooperation on aircraft – after 17 years of dispute,” von der Leyen said.

The United States and the European Union agreed to suspend tariffs imposed as part of the trade war for a period of five years.

The detailed information on “acceptable support” for the world’s two biggest aircraft manufacturers will reportedly be released later.

The agreement will end trade tariffs introduced during the Donald Trump presidency in relation to the Airbus and Boeing. The US previous administration levied duties worth $7.5 billion on European products after the World Trade Organization ruled that Brussels had given unfair subsidies to Airbus.

The EU retaliated with tariffs worth $4 billion on US goods based on another WTO ruling that said the US had provided illegal aid to Boeing.

The news of a compromise pushed Airbus stock up by nearly 1.5% in European trading, while shares in Boeing rose around 1% during pre-market trading in the US.