US and EU reach deal on Boeing and Airbus

European Commission President Ursula von der Leyen announced on Tuesday that the United States and the European Union have reached a deal to end a damaging dispute over subsidies to rival plane makers Boeing and Airbus and phase out billions of dollars in punitive tariffs.

"The agreement we found now really opens a new chapter in our relationship because we move from litigation to cooperation on aircrafts and that after almost 20 years of disputes," she said.

Both sides said they would also work together to analyse and address the "non-market practices of third parties that may harm our large civil aircraft sectors," according to the EU's executive branch.

The trade dispute skyrocketed under the Trump administration, and saw duties slapped on a range of companies that have nothing to do with aircraft production, from French winemakers to German cookie bakers in Europe and U.S. spirits producers in the United States, among many others.

The U.S. imposed what could have amounted to $7.5 billion (6.1 billion Euros) in tariffs on European exports in 2019 after the World Trade Organization ruled that the EU had not complied with its rulings on subsidies for Airbus, which is based in France.

The EU retaliated last November with up to $4 billion (3.2 billion Euros) in punitive duties after the WTO ruled that the U.S. had provided illegal subsidies to Seattle-based Boeing.

In March, weeks after Biden had taken office, the two sides agreed to suspend the tariffs. That suspension started on March 11 for four months.

The new agreement will officially go into effect on July 11.

IMAGE: AP