Boeing Co (NYSE:BA) and its French rival Airbus are likely to see their business boosted after a 17-year long spat over subsidies to aircraft makers between the US and the European Union finally ended with both sides agreeing to suspend tariffs for five years.
After two days of intensive negotiations between representatives from Brussels and the Biden administration, European Commission president Ursula von der Leyen said on Tuesday that the agreement was “a major step” in resolving the long-running dispute.
“This shows the new spirit of cooperation between the EU and the US and that we can solve the other issues to our mutual benefit. Together we can deliver for our citizens and businesses”, she added.
Going forward, the two sides will now continue to discuss methods to implement the agreement in areas such as financing, research and development funding and specific support of large civil aircraft.
The dispute originally began in 2004, when the US filed a case at the World Trade Organisation (WTO) against the EU, arguing that the bloc was illegally subsidising Airbus. The EU then filed a complaint against the US in May 2005 for what it said was its unlawful support for Boeing.
Following WTO decisions, both the US and the EU imposed punitive tariffs on each other’s exports in 2019 and 2020 respectively during the Trump presidency, affecting US$11.5bn in trade between the two sides. As a result of the spat, EU and US businesses have had to pay over US$3.3bn dollars in duties.
Following the news, shares in Boeing rose 0.4% to US$246.11 in pre-market trading in New York.