EU and US make 'breakthrough' in aviation subsidy row by suspending tariffs for five years

Tue 15 Jun 2021
Posted by: William Barns-Graham
Trade News

After two nights of intensive talks, the US and EU have reached an agreement to suspend tariffs imposed because of a row over subsidies for aviation firms Airbus and Boeing. 

Duties will be suspended for five years on a range of goods including US motorbikes and French wines.


The White House has released a statement hailing the “breakthrough” in the talks.

EU trade commissioner Valdis Dombrovskis told the FT that the agreement will give both parties “time and space to find a lasting solution”, while “saving billions of euros in duties for importers on both sides of the Atlantic”.


Both Boeing and Airbus shares gained on news this morning that the long-running dispute was nearing a conclusion, reports

According to FT sources, the agreement also creates a working group and ministerial dialogue on subsidy limits.


Politico reports that the Biden administration has rushed through the deal in a bid to secure EU allyship in its bid to contest China’s growing trade and geopolitical influence. 

However, it claims that “EU officials are fuming that Biden hasn’t yet fully ended the trade war initiated by his predecessor Donald Trump”.

Disputes remain

Ongoing disputes remain, not least over Trump-era tariffs on steel and aluminium.

The Biden administration has so far been less forthcoming on resolving this row as it faces opposition at home from US steelmakers who benefit from the protective duties.

Brussels and Washington have pledged to work together to address steel and aluminium excess capacity “ensuring the long-term viability of our steel and aluminium industries”, reports Politico.

Outstanding disputes also remain over digital taxes and data flows.