Aviation: US, EU End Boeing-Airbus Subsidies Dispute

  • General
  • June 16, 2021
  • 68
  • 4 minutes read

US President Joe Biden

Shortly after this year’s G7 Summit, the United States and the European Union have reached a truce in a 17-year-long fight over aircraft subsidies to Airbus on the European side and Boeing on the US side.

  • Airbus and Boeing are the foremost manufacturers of commercial airplanes today, with Airbus on the European side and Boeing on the American side. The US and EU have long been at loggerheads over them with accusations on each end of illegally subsidizing their aligned aircraft companies.
  • The aviation dispute between the US and EU for 17 years marked the longest-running dispute in the history of the World Trade Organisation  (WTO), under which complaints were logged. Now, it appears to be resolved.
  • On the resolution terms, the US and EU have each agreed to provide R&D funding for their aligned aviation companies through a transparent process that’ll be open to both. Also, they’ve agreed to not give specific support, like tax breaks, to their own producers that’ll hurt the other side.
  • More so, the US and EU have agreed to do away with tariffs on $11.5bn worth of trade that were instituted as part of that dispute. On the US part, it was tariffs on certain product categories that brought in $2.2bn in duties paid by its importers, and on the EU side $1.1bn paid by importers.
  • The tariffs on the US side were imposed during the Trump administration.
  • “This shows the new spirit of cooperation between the EU and the US and that we can solve the other issues to our mutual benefit,” EU President Ursula von der Leyen said in a statement. 
  • Boeing and Airbus are the coveted aviation companies serving America and the EU respectively. They both have major ties to their governments due to the strategic importance of aviation companies supplying aircraft both on the commercial and military sides.

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