The Boeing-Airbus tariff dispute just will not die

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Good morning. David Meyer here in Berlin, filling in for Alan.

It feels like the Airbus-Boeing tariff dispute, which at 16-years-and-counting is now old enough to be classified as an adult in some countries, will never end.

Just a few weeks ago, the European Union announced that the last illegal subsidies to Airbus had been done away with, through amendments to the plane-building consortium’s investment contracts with the French and Spanish governments. As a result, Trade Commissioner Phil Hogan said, the U.S. should “immediately” lift its tariffs of $7.5 billion in EU goods.

That didn’t happen. Yesterday, U.S. Trade Representative Robert Lighthizer said the EU’s actions were not enough. His office did not increase the U.S.’s tariffs on EU goods, but rather shuffled them around, taking some Greek and British items off the list of tariffed goods and adding an equivalent tally of French and German products.

Airbus isn’t happy, insisting that its funding arrangements are now in “full compliance” with the World Trade Organization’s rulings on the matter, and noting that the U.S.’s continued tariffs on Airbus aircraft come “at a time when aviation and other sectors are going through an unprecedented crisis.” The company called on the EU to “respond appropriately to defend its interests.”

The EU has already threatened to hit the U.S. with counter-tariffs, though it can’t do so until the WTO specifies an upper limit – a decision that should come very soon. (Of course, the U.S. sees such tariffs as unjustifiable, because it also claims to have removed the illegal subsidies that Boeing was receiving.)

So can fresh tariffs on American goods be avoided? Perhaps. As Lighthizer said yesterday: “The United States will begin a new process with the EU in an effort to reach an agreement that will remedy the conduct that harmed the U.S. aviation industry and workers and will ensure a level playing field for U.S. companies.”

Wouldn’t it be nice if some measured negotiations could reduce international trade tensions for once, and stop this dispute from reaching voting age?

More news below.

David Meyer


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This edition of CEO Daily was edited by David Meyer.

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