The United States and European Union have agreed to suspend the trade war between Airbus and Boeing and instead focus on a common rival: China.
Airbus-Boeing Feud Ends In Joint Bid To Counter China
For 16 years, Airbus and Boeing have waged an extended battle against one another over state aid and aircraft subsidies. Boeing claimed Airbus benefits from sate aid in a way that distorts markets while Airbus claimed Boeing benefits from state aid in a way that distorts that markets. Both were valid charges.
That led both the European Union and United States to file charges at the World Trade Organization (WTO). In 2019, the WTO ruled the USA could impose tariffs on Airbus (though Delta found a creative way around them). The Trump Administration imposed tariffs almost immediately. In 2020, the WTO allowed the European Union to impose tariffs on Boeing.
Today, both sides agreed to suspend tariffs for five years and instead jointly work to counter China’s aircraft production ambitions in a way “that reflect our standards for fair competition.”
Ursula Von Der Leyen, President of the European Union, announced the breakthrough on Twitter:
The meeting started with a breakthrough on the aircraft dispute.
Today we move from litigation to cooperation.
We are ending the longest trade dispute in the history of the WTO.
We are delivering. pic.twitter.com/h3kKqQSHgv
— Ursula von der Leyen (@vonderleyen) June 15, 2021
U.S. Trade Representative Katherine Tai added:
“Today’s announcement resolves a long-standing irritant in the U.S.-EU relationship. Instead of fighting with one of our closest allies, we are finally coming together against a common threat.
“This deal will shore up the longer-term competitiveness and innovation of a key sector — aircraft — that is one of the most important sources of middle-class jobs at home.”
Nevertheless, Kai warned that tariffs on European goods would be re-imposed if Airbus breaks the deal. The deal is expected to save more than 1.2 million jobs.
The deal comes as President Joe Biden wraps up his first overseas trip as POTUS. The United Kingdom hopes to reach a similar deal with the USA in the coming days.
Airbus’ Chief Commercial Officer Christian Scherer praised the deal:
“Anything that levels the playing field in this highly competitive industry and avoids this terrible lose-lose proposition of tariffs across the Atlantic or across any borders for that matter is good.”
But state support for Airbus and Boeing will continue. This is a fragile peace.
CONCLUSION
Airbus and Boeing are no longer at war. Both sides will turn a blind eye to state aid, which seems the only logical agreement in light of entrenched interests on both sides of the Atlantic.
image: @vonderleyen / Twitter
Owning the market oriented Chinese “Communists” by adopting state planning in supposedly “Capitalist” USA. What a plan!
Nudging the US civil aviation industry into the military aviation Complex has really worked out great for Boeing-Douglas-Lockheed. Just look at that pace of innovation in the past 25 years! I think we can now safely say we’ve seen the pinnacle of Boeing and US aviation, which can’t even deliver its derivative airplanes without constant fiascos, much less design and build anything on a clean sheet.
Only now realizing this??? The People’s Republic of China has long played Boeing against Airbus and McDonnell Douglas before that. “Build your planes here or else!”
So the MD-80 and MD-90 was built there. The A320 is now built there.
Look at the ARJ21 and MD-80. Looks similar??? The ARJ21 uses the same tooling as was used for the MD-80.
Look at the C919 and A330. Looks similar???
I was gonna say – why did it take this long for Boeing and Airbus to agree that China’s theft of intellectual property is a far bigger concern.
@derek +1
@Caleb +1
This is what American leadership and strategic vision looks like. Quite the change after four abysmal years.