EU, U.S. agree truce in 17-year jet subsidy war

Joe Biden met with EU leaders in Brussels on Tuesday (July 15), and the U.S. president had a big deal to show for it.

The U.S. and EU have agreed a truce in their near 17-year dispute over subsidies to Airbus and Boeing.

Biden called it a "major breakthrough."

Since 2004 the two sides have been battling in parallel cases at the World Trade Organization.

Both argue that the other side is providing unfair support to their own aerospace champion.

Back in March, Washington and Brussels agreed to suspend for four months tariffs on $11.5 billion in goods.

The levies had hit everything from EU cheese and wine, to U.S. tobacco and spirits.

Now the pair have agreed to suspend the tariffs for five years, while still working on an overarching agreement.

European Commission chief Ursula Von der Leyen hailed the deal:

"The agreement we have filed now really opens a new chapter in our relationship, because we move from litigation to cooperation on aircraft, and that after almost 20 years of disputes."

U.S. Trade Representative Katherine Tai said the two sides had agreed to clear statements on what support could be given to airliner makers, and she said they would now both be watching Beijing instead:

"The deal on large civil aircraft includes a commitment for concrete joint collaboration to confront the threat from China's ambitions to build an aircraft sector on non-market practices."

The pair still have to resolve a Trump-era dispute over U.S. tariffs on EU steel and other metals, which are backed by many U.S. producers.

Even so, Brussels is pushing what it calls a "positive agenda" on trade with Washington, and says the two can work together to drive WTO reforms.

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