EU, US Unveil 5-Year Truce In 17-Year Aircraft Trade Spat

The European Union and the United States are on the verge of announcing a truce in their 17-year conflict over aircraft subsidies, bringing to a close one set of Trump-era tariffs which had soured relations between them. As Reuters reminds us, the two sides have been battling since 2004 in parallel cases at the World Trade Organization over subsidies for U.S. planemaker Boeing and European rival Airbus

The EU and US agreed in March to a four-month suspension of tariffs on $11.5 billion of goods from EU wine to U.S. tobacco and spirits, which they had imposed in response to the row. On Tuesday they were set to remove them for five years, while still working on an overall deal on what subsidies to allow. Fast forward to today when the U.S. and the EU agreed to extend the temporary ceasefire to a five-year truce in the 17-year dispute over aircraft subsidies. The agreement, to be announced during an EU-U.S. summit with U.S. President Joe Biden, should allow them to focus on the threat posed by China's nascent commercial aircraft industry.

Under the Airbus-Boeing deal, all future passenger aircraft will be required to be developed without subsidies, sources said although since this industry is inherently unstable, and subsidies are a must, we can only assume that the deal will quietly collapse in the next 12 months.