US and Europe end Airbus-Boeing dispute as they eye threat from China

The United States and the European Union have resolved a long-running trade dispute over subsidies to Airbus and Boeing, a move that could improve transatlantic relations as both sides seek to counter China’s rising economic influence.

US officials confirmed on Tuesday they struck a truce to end the dispute over government subsidies for the world’s leading commercial plane makers during a summit in Brussels. The two sides agreed to suspend tariffs imposed as part of the trade battle for a period of five years. They will also each release statements spelling out “acceptable support” for aircraft manufacturers. The settlement “resolves a long standing trade irritant in the US-Europe relationship,” US Trade Representative Katherine Tai said. “Instead of fighting with one of our closest allies, we are finally coming together against a common threat.” Tai said the US had reserved the right to reapply the tariffs if Europe doesn’t uphold its side of the deal. EU Trade Commissioner Valdis Dombrovskis and Tai have scheduled a news conference for 9 a.m. ET.

There were signs in recent months that the conflict over subsidies may be coming to a close after years of failed negotiations at the World Trade Organization. The United States, European Union and United Kingdom agreed in March to suspend related tariffs worth billions of dollars for four months. The suspension marked a first step toward repairing a trade partnership that’s been strained for 17 years by the complaints about government support for Airbus (EADSF) and Boeing (BA). The dispute dates to 2004, when EU authorities said Boeing had received $19 billion in unfair subsidies from federal and state governments. The United States filed a similar claim that year over European subsidies to Airbus. The feud escalated when the Trump administration imposed tariffs on European goods including Parmesan cheese, French wine and Scotch and Irish whiskies. The European Union, in turn, slapped tariffs on US goods such as wine, cheese and suitcases.

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