The US and the European Union agreed to end their 17-year dispute over aircraft subsidies to Airbus SE and Boeing Co. that saw the allies impose tariffs on $11.5 billion of each other’s exports, EU officials said.
The European Commission spent Monday night discussing the accord with member states to get the deal over the line before an EU-U.S. summit in Brussels with President Joe Biden, according to officials familiar with the deliberations, who asked not to be identified because the talks are private.
The landmark accord turns the page on a key conflict in former President Donald Trump‘s trade war and sets the stage for a new era of transatlantic cooperation over state aid at a time when China is vying to displace the Boeing-Airbus civil aircraft duopoly.
The agreement was driven, in part, by a growing awareness among policy makers in Brussels and Washington that China’s state-sponsored aerospace manufacturer Commercial Aircraft Corp. of China, or Comac, is on track to become a legitimate rival in global planemaking by the end of the decade.
In 2019, the World Trade Organization authorized the U.S. to level tariffs against $7.5 billion of EU exports annually over government support for Airbus, while the EU won permission to hit back with levies on $4 billion of U.S. goods.
The levies were suspended by both sides in March as negotiators worked toward an agreement. They cover items ranging from airplanes and parts to tractors, wine and cheese. The U.K. unilaterally suspended its tariffs with the U.S. in December as it broke from the EU.