United States and European Union trade dispute affecting motorcycles coming to an end

Lawrence Kim
June 15, 2021

A Department for International Trade spokesman said: "We have been working hard with the United States to de-escalate and agree a settlement after making the first move in suspending tariffs". She said they could be reimplemented if US companies are not able to "compete fairly" with those in Europe.

European Commission president Ursula von der Leyen (L) said: "We have taken a major step in resolving the longest trade dispute in the history of the WTO". 'Instead of fighting with one of our closest allies, we are finally coming together against a common threat'.

The United States may find it tougher to remove the metals tariffs, which also apply to other countries such as China, because they are still backed by many USA metal producers and workers.

They agreed in March to a four-month suspension of tariffs on $11.5 billion of goods from European Union cheese and wine to US tobacco and spirits, which the WTO had sanctioned. The EU retaliated last November with $4 billion in punitive duties after the WTO ruled that the US had provided illegal subsidies to Boeing.

While the dispute escalated during the Trump administration, the levies, which extend beyond aircraft parts to items like tractors, wine and cheese, were suspended by both sides in March as negotiators worked toward an agreement. The new agreement will officially go into effect on July 11.

The tariffs - imposed as a outcome of a dispute over illegal subsidies to aircraft manufacturer Airbus - "hurt companies and people on both sides of the Atlantic", the European Union said in a statement today (Tuesday, June 15). They would also work to counter investments in aircraft by "non-market actors", she said, referring specifically to China.

Airbus, which is headquartered in France but also has centers in Germany and Spain, welcomed the agreement.

"Anything that levels the playing field in this highly competitive industry and avoids this bad lose-lose proposition of tariffs [is] good", said Christian Scherer, Airbus chief commercial officer.

France's finance and European affairs ministers also hailed the deal.

The accord turns the page on a key conflict in former President Donald Trump's trade war and sets the stage for a new era of transatlantic cooperation over state aid at a time when China is vying to displace the Boeing-Airbus civil aircraft duopoly.

The allies will also vow to end a separate dispute over steel and aluminum, in a sign of progress in resetting the relationship. That move enraged European countries, a lot of them North Atlantic Treaty Organisation allies, because it was justified as a measure to protect USA national security. The EU retaliated by raising tariffs on products like USA -made motorcycles, bourbon, peanut butter and jeans.

The so-called Article 232 proceeding both hurts European producers and raises the cost of steel for American companies.

Other reports by Click Lancashire

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