EU and US agree to suspend tariffs and negotiate settlement on aviation subsidies

Mon 8 Mar 2021
Posted by: William Barns-Graham
Trade News


With the UK still celebrating the suspension of US tariffs on British goods including whisky, cashmere and cheese, the EU is now also benefitting from the administration change in Washington.

The US and EU have agreed to suspend tariffs on a wide range goods moving in both directions – including French wines, German cookies and American Harley Davidsons.

Four months to a new deal

The suspension will last for four months while the US negotiates with the EU and UK over a settlement to the long-running dispute over aviation subsidies, Fortune reports

The decision followed a call between Presidents Joe Biden and Ursula von der Leyen on Friday (5 March).

European Commission President Von der Leyen tweeted that the decision signalled a “fresh start” and that Brussels was “committed to solving these disputes”.

Outstanding issues

US President Biden has also been invited to a European health summit in Rome on 21 May at which the fight against Covid-19 will be discussed.

At the summit other outstanding issues on the table could include former President Trump’s tariffs on EU steel and aluminium and the European commitment to digital taxes on American tech giants such as Google and Amazon.


The FT reported that the four-month suspension was a sign that the 16-year-old transatlantic trade battle over state aid provided to Airbus and Boeing could be coming to an end. 

The goodwill gesture is intended to prepare the ground for negotiations on a permanent solution to the dispute by setting joint rules on permissible aircraft subsidies.

This would address the challenge of new entrants from markets including China, as well as introducing limits for future subsidies and monitoring and enforcement mechanisms.

Negotiated settlement

Airbus welcomed the decision to suspend tariffs, saying it supports “all necessary actions to create a level-playing field and continues to support a negotiated settlement”.

Boeing said it hopes the deal would allow for talks to “bring a level playing field to this industry”.