U.S., EU Resolved Rift Could Be a Boost for Some U.S. Agricultural Exports
A 17-year conflict over aircraft subsidies is coming to a temporary close as the United States and European Union have agreed to a truce, and it could spill over into a positive move for certain U.S. agricultural goods.
U.S. Trade Representative Katherine Tai says "after weeks of intense diplomacy," the two countries agreed to suspend subsidies for five years. This temporarily ends a dispute over subsidies for rival plane makers Boeing and Airbus, as Tai says tariffs could be put back in place if the U.S. companies are not able to “compete fairly” with those in Europe.
The action comes after the Trump administration added tariffs on the EU. In March, the two countries agreed to a four-month suspension on tariffs on everything from EU cheese and wine to U.S. tobacco, spirits, cotton, cheese, vegetables and nuts. In total, the tariffs were placed on $11.5 billion worth of goods. The agreement now extends the rollback of those tariffs.
After weeks of intense diplomacy, we have reached a deal on a set of high-level principles that resets U.S.-EU engagement in the large civil aircraft industry. How this affects US workers:? pic.twitter.com/9IJpw1za0M — Ambassador Katherine Tai (@AmbassadorTai) June 15, 2021
EU trade chief Valdis Dombrovskis called the agreement "a major confidence boost for EU-U.S. relations" during a press conference this week.
In addition to the pause on tariffs, the two international trading players said they would work to counter investments in aircraft by non-market actors like China.
Both the EU and U.S. voiced confidence the dispute would be resolved within five years. The tiff dates back to 2004 when World Trade Organization (WTO) subsidy cases between Boeing and Airbus, with each arguing unfair competition.
