US and EU near deadline on $11.5 billion tariffs in long-running aircraft dispute

The United States and the European Union have yet to decide whether to continue suspending or to reimpose tariffs on $11.5 billion of goods in a decades-long dispute over aircraft subsidies with just days to go before their truce expires.

The two sides in 2004 lodged parallel cases at the World Trade Organization over subsidies for U.S. plane maker Boeing and European rival Airbus, accusing each other of unfair competition.

The WTO in 2019 authorised the United States to impose tariffs on $7.5 billion of EU goods, such as cheese, in the case against Airbus. A year later, it gave the EU the right to respond with countermeasures on $4 billion of U.S. imports, including tobacco and spirits. On June 15, 2021, both sides agreed to suspend these tariffs for five years.

A European Commission spokesperson said on Thursday that discussions were ongoing to extend the suspension.

The two sides said in 2021 they aimed to work on an overarching agreement on subsidies for large aircraft and to counter investments in aircraft by "non-market actors," meaning China. They said then they expected the dispute would be resolved within five years.

Instead, tariff tensions have risen, with the European Union facing fees on most of its exports to the United States, although aircraft and aircraft parts are excluded.