The US and EU are set to announce a five-year suspension of tariffs over aircraft subsidies, marking an end to a trade dispute that has lasted 17 years.
The two sides have agreed to pause the world’s largest corporate trade dispute and focus on the threat posed by China’s nascent commercial aircraft industry, sources told Reuters.
The detente will be a major boost to Europe’s Airbus and US Boeing while granting relief to dozens of other industries affected by tit-for-tat tariffs, which were suspended in March.
If there is no progress in the talks, the countries face a renewed trade war within weeks.
US trade representative Katherine Tai and EU counterpart Valdis Dombrovskis discussed the dispute in their first face-to-face meeting yesterday ahead of a US-EU summit today.
The European Commission and US have vowed to reach an agreement before 11 July, when the currently suspended tariffs are due to resume.
Officials had been aiming for a permanent solution through two treaties — one between the US and EU and another post-Brexit deal between the US and UK — on new ground rules for aerospace.
But the process has reportedly proven complex and the two sides are now planning to push back the tariffs by a number of years.
This would give them more time to focus on broader agendas, such as China’s ambitions to become a major player in the global aerospace market.
The dispute, which dates back to 2004, has seen $11.5bn of tariffs imposed after the sides clashed over claims of unfair aid for Boeing and Airbus.