The symbol of a new beginning
EU Commission President Ursula von der Leyen and U.S. President Joe Biden agreed in a telephone conversation to refrain from imposing punitive tariffs for the time being. The reason for the punitive tariffs was a dispute concerning special levies imposed on aircraft construction subsidies. This agreement is initially valid for the next four months. The decision is intended as a symbol of the new beginning between the U.S. and the EU.
The dispute in detail
In the detail the controversy concerns subsidies for the European airline company Airbus as well as its competitor the US-American company Boeing. Because of illegal state aid, the World Trade Organization (WTO) agreed to impose reciprocal punitive tariffs. Affected would be, for example, wine from Germany and France, olive oil from Spain as well as Parmesan cheese from Italy.
Trump imposed even more tariffs
EU Trade Commissioner Valdis Dombrovskis described the move as a “crucial breakthrough that gives EU exporters a welcome tailwind and gives both sides time and space to resolve this protracted conflict.” To appease the dispute, the EU shared its hopes about more open talks with the new U.S. President Biden. No agreement could be found with his predecessor Donald Trump.
Also, Trump imposed special U.S. tariffs on steel and aluminum imports, to which the EU responded with tariffs on products from the U.S. such as jeans, bourbon whiskey, motorcycles and peanut butter. However, these have not yet been negotiated. The special tariffs will have a negative impact on end consumers, who can expect price increases.