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EU-US Trade Dispute: Airbus Concedes but the USA unlikely to do so

Airbus, the aviation company at the centre of the on-going EU-US trade dispute, has agreed to make changes to the terms of the financing it receives in order to bring it in compliance with the WTO ruling made against the company.

Since October 2019, the USA has applied a punitive tariff on imports of Irish butter and cheddar, among other products, after the World Trade Organisation awarded it the authority to claim $7.5 billion in annual compensation, in retaliation for EU subsidies, in the form of low-interest rate development loans paid to Airbus.

These tariffs are costing the Irish dairy sector an estimated €40 million a year; a particularly difficult hit considering the ongoing uncertainty and contingency costs related to Brexit and shipping disruption and cost increases as a result of the COVID-19 pandemic.

EU Trade Commissioner, Phil Hogan, has said that with this move to raise interest rates paid by Airbus, it is now in full compliance with the ruling of the WTO and therefore there is no grounds for the continuation of the additional harmful tariffs applied by the US on EU exports. He has called on the US to lift the tariffs immediately.

However, a swift conclusion to the dispute is not looking likely and the EU may well need to continue to wait until the autumn, when the US general election and another expected WTO ruling- this time in favour of the EU- could finally bring the USA to the negotiation table.

Alison Graham – European Affairs Executive