Over nearly two decades, the United States and the European Union (EU) have been engaged in a tit-for-tat battle over allegations that each was providing unfair subsidies to their respective aircraft manufacturers, Boeing and Airbus. This conflict has been the world’s largest ever corporate trade dispute.

In recent years, the feud has gone past aviation discussions and into punitive tariffs on imports. In 2019, the World Trade organization allowed the United States to impose tariffs on $7.5 billion in European Union goods over EU state support for Airbus. This was then followed in 2020 with the WTO allowing the EU to impose tariffs on $4 billion in American goods in retaliation for subsidies granted to Boeing.

Tariffs Across the Board

These tariffs are wide-ranging and impact key parts of both economies. The United States in December announced tariffs on aircraft parts, wine, cognac, and brandies from both France and Germany. This is in addition to the long list of similar products that have had 25 percent duties applied to them since 2019.

The European Union has levied additional customs duties of various American products including Boeing planes, farm produce such as wheat and tobacco, strong alcohol, and chocolate. Both Boeing and Airbus are consistently neck and neck in competition, so it’s very clear why each side accused the other of playing unfairly.

President Biden has made it known he wishes to restore good ties with traditional U.S. allies like the European Union which at times came under strain from the previous administration. However, that restoration of good ties seems to stop at tariffs.

This past week, the U.S. Trade Representative stated that “it is unnecessary at this time to revise” the tariffs in place against the European Union. Since being sworn into office, President Biden has suggested he won’t modify the latest tariffs enacted by outgoing president Donald Trump on January 12.

A Noncommittal Meeting

It has recently come to light that French President Emmanuel Macron spoke with President Biden late January about the long-running dispute between the two entities. He allegedly suggested that France and the United States seek a negotiated settlement to draw down the conflict related to the trade dispute.

It has been reported that President Biden responded saying that the relevant teams would follow up, but he generally was noncommittal on the outcome.

The trade dispute has lasted through three presidential administrations and appears to come off as an issue that has bipartisan support given that administrations from both major political parties in the U.S. have continued the longstanding trade dispute. It’s unclear that a resolution is likely to come any time soon, as each involved party would need to feel that the other is playing on a level playing field.

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Hemal Gosai

Hemal took his first flight at four years old and has been an avgeek since then. When he isn't working as an analyst he's frequently found outside watching planes fly overhead or flying in them. His favorite plane is the 747-8i which Lufthansa thankfully flies to EWR allowing for some great spotting. He firmly believes that the best way to fly between JFK and BOS is via DFW and is always willing to go for that extra elite qualifying mile. Hemal's opinions are his own and do not reflect those of his employer.

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