UK halts tariffs for Boeing-Airbus dispute

The UK has decided to break ranks from the EU regarding the Boeing-Airbus dispute and freeze its sanctions on the US, which are currently being waged over state subsidies.

The feud has been ongoing since 2004 and the UK hopes freezing the tariffs will open the door for a future multilateral trade deal with the US once the Brexit deadline expires on December 31.

Last month, the EU hit the US with $4 billion (€3.38 billion) worth of tariffs, which, themselves had been delayed owing to the 2020 presidential election.

It followed sanctions placed by the Trump administration in November 2019 for duties of up to 25% on European imports into the US after the World Trade Organisation (WTO) found that Airbus had also benefitted from unlawful state aid.

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Tensions between the EU and US have been further soured owing to the Nord Stream 2 project, which has just resumed construction after a year-long hiatus.

The move to ease tariffs has been viewed as a move to gain favour with US President-elect Joe Biden as the UK still attempts to gain some sort of trade deal with the US.

Liz Truss, the UK's trade secretary said the UK wanted to “come to a negotiated settlement so we can deepen our trading relationship with the US."

With the Brexit deadline looming, there is a discussion about whether or not the UK would have continued imposing tariffs on the US once the UK formally withdraws from the bloc, or whether or not the sanctions would cease once the UK officially left.

The EU has noted the UK would have lost the right to impose tariffs as the sole claimant in the case against Boeing was the EU.

The US, however, levied tariffs against not just the EU, but Spain, the UK, Germany and France as separate and independent nations.

Joe Biden has been clear on his stance in entering multilateral trade deals once he takes office on January 20.

Last week, the president-elect told the New York Times: “I’m not going to enter any new trade agreement with anybody until we have made major investments here at home and in our workers and in education.

“I want to make sure we’re going to fight like hell by investing in America first.”

Back in October, the US offered a resolution to the Boeing-Airbus dispute.

The terms of the agreement were simply that Airbus would repay the millions of dollars given the European nations as financial aid.

The EU's chance of accepting these terms was always unlikely as it would cost Airbus in the region of $10 billion (€8.2 billion) and the EU's aviation sector was still reeling from the effects the coronavirus pandemic had on travel.

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Boeing and Airbus have both repeatedly said they want a negotiated settlement to define new rules for funding the development of aircraft.

However, they remain divided on receiving state funds to aid in their businesses, musings which have only been exacerbated with the recent news China has launched a state-owned competitor.

A spokesperson for Boeing said: "The UK's move to suspend harmful tariffs would allow us to work with the UK as a global commercial aviation hub. We support a level playing field with free and fair competition across aviation.”

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