In a monumental shift in policy, the European Union (EU) and the United States (US) agreed to temporarily suspend all tariffs related to the Airbus versus Boeing tariff war, paving a way to solve the conflict.
The two sides have agreed to pause tariffs on various imported products from the respective markets for four months, allowing “both sides to focus on resolving this long-running dispute,” read the announcement by the European Commission (EC) on March 5, 2021. The WTO allowed the US to impose tariffs on goods from the EU worth up to $7.5 billion in October 2019, while the EU retaliated with its own set of tariffs on imports from the US worth up to $4 billion in October 2020.
While the European side of the conflict sought an agreement to avoid its retaliatory measures, the US “at that time was not ready to accept a negotiated settlement,” which included an immediate removal of tariffs on EU goods. Thus, the European side went forward with the retaliation measures in November 2020.
The suspension in tariffs is a “significant step forward,” commented the EC Executive Vice-President and Trade Commissioner Valdis Dombrovskis. “It marks a reset in our relationship with our biggest and economically most important partner,” Dombrovskis added, emphasizing that amidst the current pandemic, this is only a “win-win for both sides.”
“This suspension will help restore confidence and trust, and therefore give us the space to come to a comprehensive and long-lasting negotiated solution,” he concluded.
The tariff war began in 2004 when the US requested a consultation in front of the World Trade Organization (WTO) between it and several governments within the EU, which were involved with Airbus, namely France, Germany, Spain, and the United Kingdom.