European Union and United States agree 5-year ceasefire on Airbus-Boeing

Biden's first overseas trip

Biden's first overseas trip

United States trade representative Katherine Tai, speaking to reporters in Brussels on Tuesday, said the tariffs would remain suspended as long as the terms of the agreement are upheld and while they work on addressing issues including outstanding subsidies already paid.

Former EU member Britain, which was also involved in the dispute as a home to Airbus production, said it hoped for a similar deal within days.

'I´m very positive and convinced that together we will deliver today, ' European Commission President Ursula von der Leyen told reporters Tuesday, hours before a meeting in Brussels with President Joe Biden.

Brussels and Washington have said they would seek to address excess global steel capacity largely centred in China.

Airbus shares ticked up 0.4% in Paris on Tuesday afternoon, while Boeing's stock was up 0.7% as markets opened in the US. They have risen 15% year-to-date.

The two sides have been battling since 2004 in parallel cases at the World Trade Organization over subsidies for US planemaker Boeing and European rival Airbus, which each argued exposed the other to unfair competition. But they argue that Washington also grants indirect aid to Boeing under secret defense contracts.

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The U.S. imposed what could have amounted to $7.5 billion 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.

Both then imposed tariffs on each other's exports as a result of which European Union and U.S. businesses have had to pay over $3.3bn in duties.

It started in 2004, when the United States filed a case at the WTO against the European Union, arguing that the bloc was illegally subsidising the Airbus.

In March, weeks after Biden had taken office, the two sides agreed to suspend the tariffs. But he said that it has long looked like there were mutual infractions, and "seeking to bolt the stable door long after the Airbus horse had left was futile". While the agreement marks a breakthrough in transatlantic trade relations, a dispute over steel and aluminum tariffs imposed by Donald Trump continues. That move enraged European countries, majority North Atlantic Treaty Organisation allies, because it was justified as a measure to protect US national security.

This one is trickier and there has been back-and-forth over the exact language in the drafts of the joint communique, but both sides seem to agree on pushing for a deadline by the end of the year, said the officials, who asked not to be identified because the talks are private.

The European Commission, which oversees EU trade policy, last month suspended for up to six months a threatened June 1 doubling of retaliatory tariffs on Harley-Davidson motorbikes, US whiskey and motorboats, and refrained from slapping tariffs on more USA products from lipstick to sports shoes.

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