Boeing-Airbus Trade Feud Ends After 17 Years

By Noah Rothstein

On June 15, President Joe Biden announced that the U.S. and EU have agreed to a truce over subsidies for Boeing and Airbus. Under the agreement, there will be a suspension of tariffs on goods, including wine, cheese, and tractors, for five years.

Since 2004, the U.S. and the EU have accused each other of unfairly subsidizing their aircraft-building giants, America’s Boeing and Europe’s Airbus. In 2019, the World Trade Organization, which adjudicates such disputes, declared both sides guilty. It allowed the U.S. to impose up to $7.5 billion in tariffs and the EU up to $4 billion worth.

President Biden told European Commission President Ursula von der Leyen, and Charles Michel, president of the European Council, that the world had changed and that the European Union and the United States working together was “the best answer to deal with these changes” that had brought “great anxiety” to citizens.

“It’s overwhelmingly in the interest of the U.S.A. to have a great relationship with NATO and the EU,” President Biden said.

“For about twenty years, we’ve been at each other’s throat. We have been too busy fighting each other,” U.S. Trade Representative Katherine Tai said.

This breakthrough still leaves some trade friction between the U.S. and the EU unresolved. President Biden kept in place import taxes that former President Donald Trump imposed on European steel and aluminum, a move that frustrated some of America’s closest allies three years ago.

At the U.S.-EU summit meeting in Brussels, President Biden and European leaders sought to ease trans-Atlantic tensions and focus on their economic adversary, China.

With competition on the world stage evolving, the U.S. and EU have agreed to pivot their attention to China. Chinese manufacturer Comac is already in the final stages of developing the C919 – a plane designed as a direct rival to Airbus’ A320neo and the Boeing 737 Max.

This issue is a microcosm of broader U.S.-EU relations. There seems to be a consensus that old alliances should be revived with the threat of China’s growing economic power and ever-frostier relations with Russia.