Aircraft builder Dispute over Airbus and Boeing put on hold
Status: 15.06.2021 6:17 p.m.
The transatlantic dispute between Airbus and Boeing had far-reaching consequences – in the form of special tariffs. Now the two aircraft manufacturers have buried the hatchet for the time being. By Torsten Teichmann, ARD studio Washington You speak of a breakthrough in Brussels. But the US and the European Union have not yet agreed on whether Airbus should repay subsidies or Boeing should forego funds. They have not found a long-term solution on how to regulate government support for the aircraft industry. Instead, both sides decided to freeze the dispute. US tariffs that have already been issued, which are intended as punitive measures for Europe, will remain suspended – for another five years. The same applies to punitive tariffs imposed by Europeans on certain imports from the USA.
“Armistice” in favor of jobs
The situation in the aviation industry certainly contributed to the compromise: The industry is severely affected worldwide by the consequences of the pandemic, travel restrictions and entry bans. Boeing needs security to invest in a successor to the 737 series, a new medium-haul aircraft with a single aisle and composite wings. For the USA there are a total of 1.2 million jobs, justified the trade representative of the USA, Katherine Tai, the readiness for a ceasefire in the trade conflict. The decision is in the interests of the American middle class.
Trade dispute between EU and USA No more punitive tariffs – for now For five years, the EU and USA are suspending mutual punitive tariffs on Boeing and Airbus.
Contribution to the transatlantic détente
And at the same time, the step serves the foreign policy goal of relaxing transatlantic relations again – as far as the domestic political sensitivities in Washington allow. Because the accusation of the elected US President Donald Trump that Europe is exploiting the United States has never completely disappeared. Specifically, the US is suspending higher tariffs on certain European imports as long as the EU’s support for Airbus does not go beyond the agreement that has now been made. And vice versa, presumably the same applies to the EU tariffs on Washington and Boeing.
EU and USA before agreement Solution in Subsidy dispute expected The dispute over subsidies for the Boeing and Airbus corporations has been simmering for 17 years.
Controversy has been smoldering for many years
The transatlantic trade conflict over direct and indirect state aid has existed for 16 years. The World Trade Organization (WTO) decided in autumn 2019 that subsidies for Airbus put its competitors at a competitive disadvantage. The WTO gave the United States the option of penalizing imports from Germany, France, Great Britain and Spain with tariffs totaling 7.5 billion US dollars annually. Since then, French cheese, German wine and EU aircraft have become significantly more expensive for the US market. Because nothing was progressing in talks from the US point of view, the administration under President Trump increased tariffs on European aircraft from ten to 15 percent in March 2020. In a second procedure, the WTO again approved the Europeans, who in turn paid higher customs duties on imports from the USA. It was about additional taxes amounting to 4.5 billion US dollars, for example on whiskey, nuts, tobacco and airplanes.
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Business recently stagnated on both sides
In the past few months, Boeing and Airbus had only delivered a few machines. According to the “Wall Street Journal”, however, the tariffs on planes in the USA mainly affect Delta Airlines, which is expanding its Airbus fleet. In Europe, Ryanair in particular had to reckon with rising prices with its standard Boeing 737 fleet. It is not known whether the airlines took over the customs duties when the machines were delivered or the manufacturers themselves. The agreement in Brussels and the postponed conflict should give both sides a little more security.
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Focus on new competition
The US Trade Representative Tai also said that instead of fighting with your closest allies, they are coming together to face a different challenge. And the common adversary is – once again on this trip by US President Joe Biden through Europe: China. The People’s Republic is building its own aircraft industry with state investments. Europe and the US are complaining that China is violating the rules of international trade and laws protecting intellectual property. But that’s also true: a competitor is just emerging for medium-haul aircraft like the Airbus A320 or Boeing 737 – and that on the lucrative Chinese market.
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