March 2021: EU and U.S. agree to suspend all tariffs linked to the Airbus and Boeing disputes

On 5 March 2021 the European Union and the United States agreed to suspend all retaliatory tariffs on EU and U.S. exports imposed in the Airbus and Boeing disputes for a four-month period. The suspension allows both sides to focus on resolving this long-running dispute. It provides an important boost to EU exporters, since the U.S. had been authorised to raise tariffs on $7.5 billion of EU exports to the U.S. Similarly, EU tariffs will be suspended on some $4 billion worth of U.S. exports into the EU.

Removing these tariffs is a win-win for both sides, at a time when the pandemic is threatening our economies.

Background

In 2018, the Appellate Body found that the EU and its Member States had not fully complied with the previous WTO rulings with regard to EU subsidies to aircraft maker Airbus.

In March 2019, the Appellate Body confirmed that the U.S. had not taken appropriate action to comply with WTO rules on subsidies to aircraft maker Boeing.

In October 2019 the WTO authorised the U.S. to take countermeasures against European exports worth up to $7.5 billion, and the U.S. imposed these tariffs on 18 October 2019. The EU Member States concerned have taken in the meantime all necessary steps to ensure full compliance.

In October 2020, the WTO authorised the EU to take similar countermeasures on $4 billion of U.S. exports to the EU against illegal U.S. subsidies to aircraft maker Boeing. The EU sought an agreement with the United States that would have allowed the EU to avoid imposing these tariffs. Since, the U.S. at that time was not ready to accept a negotiated settlement including an immediate removal of the U.S. tariffs, the EU decided on 9 November 2020 to impose its countermeasures. On 31 December 2020, the U.S. changed the reference period for the calculation of its sanctions, thereby substantially increased the range of EU products subject to tariffs.

Source: https://ec.europa.eu/commission/presscorner/detail/en/IP_21_1047

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