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[Image source=Reuters Yonhap News]

[Asia Economy Reporter Kim Suhwan] On the 15th (local time), a summit meeting between U.S. President Joe Biden and the European Union (EU) leadership is scheduled to take place, during which the United States and the EU are expected to put an end to the 17-year-long Boeing-Airbus tariff dispute. This is interpreted as both sides reaching a consensus on the need to swiftly conclude the exhausting dispute and establish a united front among allies in response to China's rise.

On the 14th, major foreign media outlets reported that at the U.S.-EU summit, the two parties are likely to agree to withdraw the mutual tariffs imposed over the illegal subsidies issue involving Boeing and Airbus and to end the dispute.

This is understood as a judgment by Western countries facing the challenge of China's challenge to the international order that trade disputes between the U.S. and European allies should not continue.

On the same day, U.S. Trade Representative Katherine Tai and U.S. Secretary of Commerce Gina Raimondo met with Valdis Dombrovskis, the EU Commissioner for Trade, to discuss the Boeing-Airbus trade dispute, according to foreign media reports.

Katherine Tai, U.S. Trade Representative (USTR) Photo by Reuters Yonhap News

Previously, in 2004, the United States filed a complaint with the World Trade Organization (WTO) against the EU, accusing it of providing illegal subsidies to Airbus. In response, the EU filed a counter-complaint, alleging that the U.S. government illegally supported Boeing through excessive tax breaks and research and development (R&D) funding.

Subsequently, in October 2019, the WTO recognized that the EU had provided illegal subsidies to Airbus, prompting the Trump administration to impose tariffs worth $7.5 billion on EU imports such as wine and whiskey. In retaliation, the EU planned to impose $4 billion worth of counter-tariffs on U.S. products but agreed to suspend the imposition until July 11.

This 17-year-long dispute between the world's largest aircraft manufacturers has been criticized for weakening the competitiveness of these companies and encouraging the rise of Chinese aircraft manufacturers.

Former USTR Representative Robert Lighthizer urged in an interview with the media last December, "The U.S. and the EU should quickly end the trade dispute and cooperate mutually to respond to the illegal subsidies provided by Chinese authorities to their aircraft industry."

Additionally, both sides are expected to agree at this meeting to withdraw tariffs imposed on major exports such as steel and aluminum and to strengthen preferential treatment in semiconductor technology cooperation.

AP News reported that a draft of the summit agreement includes cooperation between the U.S. and the EU to eliminate tariffs related to steel and aluminum before December 1.

Previously, the Trump administration imposed tariffs on European steel products in 2018 citing national security reasons. In response, the EU planned to retaliate by increasing tariffs by 50% on U.S. products such as steel, bourbon whiskey, Harley-Davidson motorcycles, and jeans, but agreed to suspend the tariff imposition following consultations with the U.S.

Thierry Breton EU Commissioner
[Photo by Reuters]

On the 14th, USTR Representative Tai met with Thierry Breton, the EU Commissioner for Internal Market, and agreed to promote bilateral trade relations and semiconductor supply chain cooperation.

After the meeting, Commissioner Breton tweeted, "We (the EU) have agreed to cooperate with the U.S. to achieve common goals," adding, "We will pursue mutual cooperation to strengthen supply chain competitiveness, expand production capacity in the semiconductor sector, and increase vaccine production."

The summit agreement is also reported to include parts that indirectly target China.

Major foreign media reported that the agreement will include commitments to efforts addressing climate change as well as promoting democracy and human rights. This indirectly refers to the Chinese authorities, who have been criticized for human rights issues such as forced labor of Uyghurs in the Xinjiang region and the suppression of pro-democracy protesters in Hong Kong.

This content was produced with the assistance of AI translation services.