Supply Chain

US, EU To Lift Tariffs On Goods As Biden Ends Aircraft Trade War

By Dayeeta Das
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US, EU To Lift Tariffs On Goods As Biden Ends Aircraft Trade War

US President Joe Biden ended one front in a Trump-era trade war when he met European Union leaders on Tuesday by agreeing a truce in a transatlantic dispute over aircraft subsidies that has dragged on for 17 years.

Arriving at the summit with EU institution leaders in Brussels, Biden said he was seeking "a great relationship with the EU and NATO" because it was in the United States' interest.

He told reporters he had very different opinions from his predecessor. Former president Donald Trump also visited the EU institutions, in May 2017, but later imposed tariffs on the EU and promoted Britain's departure from the bloc.

"I think we have great opportunities to work closely with the EU as well as NATO and we feel quite good about it," Biden said after walking through the futuristic glass Europa Building, also known as "The Egg", to the summit meeting room with EU institution leaders.

"It's overwhelmingly in the interest of the USA to have a great relationship with NATO and the EU. I have very different views than my predecessor," he said.



Biden and the EU side agreed to remove tariffs on $11.5 billion of goods from EU wine to US tobacco and spirits for five years. The tariffs were imposed on a tit-for-tat basis over mutual frustration over state subsidies for US planemaker Boeing and European rival Airbus.

"This meeting has started with a breakthrough on aircraft," European Commission chief Ursula von der Leyen said. "This really opens a new chapter in our relationship because we move from litigation to cooperation on aircraft - after 17 years of dispute ... Today we have delivered."

Biden's summit is with von der Leyen and the EU's chairman Charles Michel, who represents EU governments.

'America Is Back'

Biden also repeated his mantra: "America is back". He is seeking European support to defend Western liberal democracies in the face of a more assertive Russia and China's military and economic rise.


"We're facing a once in a century global health crisis," Biden said at NATO on Monday evening, while adding "Russia and China are both seeking to drive a wedge in our transatlantic solidarity."

According to an EU-U.S. draft final summit statement seen by Reuters and still being negotiated up until the end of the gathering, Washington and Brussels will commit to ending another row over punitive tariffs related to steel and aluminium.

Royal Palace

US Trade Representative Katherine Tai discussed the aircraft dispute in her first face-to-face meeting with EU counterpart Valdis Dombrovskis on Monday ahead of Tuesday's US-EU summit. The pair are due to speak on Tuesday afternoon.

Freezing the trade conflicts gives both sides more time to focus on broader agendas such as concerns over China's state-driven economic model, diplomats said.


Biden and US Secretary of State Anthony Blinken earlier met with Belgian King Philippe, Prime Minister Alexander De Croo and Foreign Minister Sophie Wilmes in Brussels' royal palace. On Wednesday, he meets Russian President Vladimir Putin in Geneva.

'A Chance And A Responsibility'

The summit draft statement to be released at the end of the meeting said they had 'a chance and a responsibility to help people make a living and keep them safe, fight climate change, and stand up for democracy and human rights'.

There are no firm new transatlantic pledges on climate in the draft summit statement, however, and both sides will steer clear of setting a date to stop burning coal.

The EU and the United States are the world's top trading powers, along with China, but Trump sought to sideline the EU.


After scotching a free-trade agreement with the EU, the Trump administration focused on shrinking a growing U.S. deficit in goods trade. Biden, however, sees the EU as an ally in promoting free trade, as well as in fighting climate change and ending the COVID-19 pandemic.

News by Reuters, edited by ESM. For more Supply Chain news, click here. Click subscribe to sign up to ESM: European Supermarket Magazine.

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