EU proposes six-month tariff freeze with US

EU proposes six-month tariff freeze with US
In March, the two sides agreed on a four-month suspension covering all US tariffs on $7.5 billion of EU imports and all EU duties on $4 billion of US products. (AFP)
Short Url
Updated 11 April 2021

EU proposes six-month tariff freeze with US

EU proposes six-month tariff freeze with US
  • Brussels seeks compromise in 16-year-old dispute over aircraft subsidies

BERLIN: The EU has suggested that it and the US suspend tariffs imposed on billions of dollars of imports for six months, EU trade chief Valdis Dombrovskis was quoted as telling Germany’s Der Spiegel on Saturday.

That would go beyond a four-month suspension agreed to last month, and send a signal that Brussels is seeking compromise in a 16-year-old dispute over aircraft subsidies.

The dispute about airplane subsidies is one of two ongoing trade fights with Europe. Former US President Donald Trump in 2018 imposed a tariff on steel and aluminum imports, using an obscure provision of US code that allows him to do so on issues of national security. 

European leaders, whose manufacturing industry was hit hard by the measures, decried the reasoning because most of them are longtime US allies. The EU imposed a retaliatory set of tariffs that same year.

The two sides exchanged proposals for a solution but disagreements over ensuring future compliance and aid repayment derailed efforts. The US offered a truce on Oct. 14, 2020 if Airbus agreed to repay state loans at a level of interest assuming a 50 percent product failure rate; however, the EU declined and decided to move forward with tariffs. 

“We have proposed suspending all mutual tariffs for six months in order to reach a negotiated solution,” Dombrovskis told the news magazine.

“This would create a necessary breathing space for industries and workers on both sides of the Atlantic,” he added.

In March, the two sides agreed on a four-month suspension covering all US tariffs on $7.5 billion of EU imports and all EU duties on $4 billion of US products, which resulted from long-running World Trade Organization cases over subsidies for planemakers Airbus and Boeing.

Dombrovskis also said the EU would closely monitor US President Joe Biden’s “Buy American” laws which provide for US public contracts to be awarded exclusively to American firms.

“Our goal is to push for procurement markets that are as open as possible all over the world,” he told Der Spiegel.