US pauses EU aircraft trade-spat escalation in nod to progress

President Joe Biden’s administration is forgoing a new tariff rotation in its dispute with the European Union over illegal aid to Boeing Co. and Airbus SE, a move that could help to de-escalate a 17-year dispute.

The U.S. Trade Representative and the nation’s aircraft industry decided that it’s “unnecessary at this time” to revise the tariffs on $7.5 billion of EU products, according to a notice in the Federal Register published Thursday. Nations often update or rotate the products that face tariffs in a so-called carousel strategy to increase the political impact of duties on another country.

While the Trump administration expressed a desire to reach a resolution, last month it imposed tariffs on additional products from the EU as part of the long-running dispute. Sabine Weyand, director-general for trade at the European Commission, said in January that the two parties have a chance to reach an agreement on aircraft subsidies within six months of Biden taking office.

In November, the EU instituted duties on some $4 billion in goods from the U.S. after gaining approval from the World Trade Organization. A year earlier, the U.S. sanctioned about $7.5 billion in imports from the EU including French wine and Scotch whisky.

In December, the Trump administration imposed tariffs on additional European products including some aircraft-manufacturing parts, certain wines, and some cognac and other grape brandies from France and Germany. The overall value of goods being hit remains $7.5 billion, with the U.S. adjusting the product coverage by less than the full amount justified “in order not to escalate the situation,” the USTR said at the time.