The inclusion of Boeing in the Commission’s draft retaliation proposal has raised concerns among some member states over potential countermeasures from Washington targeting Airbus, according to MEP Bernd Lange, chair of the trade committee at the European Parliament.
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EU member states and industry sectors are concerned over the inclusion of aircraft on the list of US products targeted in retaliatory measures under preparation in Brussels, according to MEP Bernd Lange (Germany/S&D), chair of the Parliament's Trade Committee.
“The big part [on the list] is the question of aircraft," said Lange, flagging that the sector would form part of the ongoing trade negotiation with the US, especially since there remains residual trade aggravation between the two sides following a protracted dispute over subsidies to Boeing and Airbus.
On 8 May the European Commission proposed a list of US products worth €95 billion that could be hit with EU counter-tariffs should Washington maintain trade barriers following a 90-day pause declared by US president Donald Trump in the trade war he launched in mid-March.
Among targeted entities is US airspace champion Boeing.
The list is now the subject of consultation with EU industry sectors, and the member states are trying to defend those of strategic importance to their economies by negotiating the withdrawal of certain US products for fear of reprisals.
Shortly after the EU countermeasures were presented, the US administration announced an investigation into the aircraft sector, which could directly threaten European champion Airbus.
France, Germany, Spain, where Airbus produces aircraft, fear US retaliation.
For 17 years, the EU and the US were locked in a bitter battle over state subsidies to their respective aerospace giants — Airbus and Boeing.
The saga began with a 1992 agreement designed to regulate government support for the two aircraft giants. But by 2004, Washington had grown dissatisfied, accusing the EU of unfairly subsidising Airbus. The US withdrew from the deal and launched a formal complaint at the WTO.
What followed was a drawn-out legal and diplomatic confrontation, which reached its peak during the first Trump administration. In 2019, the WTO authorised the US to impose tariffs on nearly $7.5 billion worth of EU goods and services annually.
A year later, in 2020, the pendulum swung in the EU’s favour. The WTO granted Brussels the right to impose tariffs on US imports in response to subsidies received by Boeing.
In 2021, a breakthrough was announced: both sides agreed to suspend the tariffs, marking a temporary truce. However, the détente is only set to last until 2026.
Last week saw evidence of some movement in the negotiations over the trade dispute: the US sent a letter to the EU which replied.
Since mid-March the US has imposed 25% tariffs on EU steel, aluminium and cars and 10% on all EU imports to the US.
Brussels prepared retaliatory tariffs but suspended them following Trump’s announcement of a 90-Day truce. However, if the negotiation fails, EU tariffs will be implemented and a fresh list of tariffs against US goods will be presented.