On March 5, 2021, the United States and the European Union (EU) issued a joint statement announcing a suspension of World Trade Organization (WTO)-authorized retaliatory tariffs in the trade  dispute involving government subsidies for large civilian aircraft.  The statement notes the suspension “will cover all tariffs both on aircraft as well as on non-aircraft products, and will become effective as soon as the internal procedures on both sides are completed.” This announcement comes one day after the United States and the United Kingdom announced a similar suspension (see Update of March 4, 2021), and today’s joint statement indicates that both the EU and the United States are committed to reaching a “comprehensive and durable negotiated solution to the Aircraft disputes.”  It also notes that “key elements” of any ultimate solution will include “disciplines on future support in this sector, outstanding support measures, monitoring and enforcement, and addressing the trade distortive practices of and challenges posed by new entrants to the sector from non-market economies, such as China.”

In this longstanding dispute, the WTO Dispute Settlement Body has authorized the EU to impose $4 billion in retaliatory tariffs annually on U.S. products and authorized the United States to impose $7.49 billion in retaliatory tariffs annually on EU products.  For additional background on this dispute and the resulting retaliatory tariffs regarding EU subsidies to Airbus and U.S. subsidies to Boeing, see SmarTrade Updates of October 4, 2019, December 9, 2019, February 17, 2020, August 13, 2020, October 15, 2020 and November 11, 2020.