The European Union just hit the snooze button on one of the longest-running trade disputes in modern history. EU member states voted on June 25 to extend the suspension of retaliatory tariffs on roughly $4 billion worth of American products, keeping the peace in the decades-old Airbus-Boeing subsidies saga.
The move prolongs a truce that was originally struck in 2021 and set to expire on July 11.
What the extension actually covers
The suspended tariffs target a range of US exports including aircraft, tobacco, and spirits. These were carefully selected retaliatory measures that the World Trade Organization authorized the EU to impose back in 2020, after ruling that Boeing had received unfair government subsidies.
The original 2021 truce was far more ambitious in scope. It represented a five-year suspension of tariffs covering up to $11.5 billion in bilateral trade. That figure includes both the EU’s $4 billion in authorized countermeasures against US goods and the US side’s own $7.5 billion in authorized tariffs on European products.
