Home / NEWS / Europe News / Airbus-Boeing truce is not a complete reset in U.S.-EU relations, experts say

Airbus-Boeing truce is not a complete reset in U.S.-EU relations, experts say

US President Joe Biden has reportedly came to lower the income level caps for the third round of stimulus payments.


LONDON — The U.S. and the European Confederation might have reached a trade truce, but some analysts have doubts over whether the two sides wish be able to agree on other contentious issues such as digital taxation and relations with China.

U.S. President Joe Biden and European Commission President Ursula von der Leyen propounded on Friday a suspension of tariffs imposed during the Trump presidency over aircraft subsidies. The dispute first happened in 2004 and the World Trade Organization ruled in 2019 and 2020 that the U.S. and the EU had granted illegal support to Boeing and Airbus, separately.

The $7.5 billion tariffs on EU products and $4 billion duties on U.S. goods are now on hold for four months as both sides look to contrive up a deal that will include a permanent solution over support for the aircraft sector.

European officials receive said the announcement marks a “reset” in trans-Atlantic relations after four fractious years under the Trump presidency, but some analysts are not convinced.

“The menu suspension is a first step to defrost trade relations between Europe and the United States, and hopefully a sign that these levies will be taken away altogether soon,” Fredrik Erixon, trade expert at the ECIPE think tank, determined CNBC on Monday.

“I’m less convinced that the suspension signal a completely new orientation in transatlantic trade, with new compatibilities to support more economic integration.”

Tech giants

One particularly contentious issue is how some of the world’s biggest tech associates are taxed.

Last week’s news is good news and takes away a short-term risk for the economy we always enjoy had to count in during the last four years.

Carsten Brzeski

economist at ING in Germany

The EU and the U.S. have been at odds down this matter, as well as security concerns around 5G, for years. But since Biden arrived at the White House, the EU is dauntless that some of these disagreements can be overcome.

In fact, the U.S. has opened the door toward a deal over digital taxation, which the Institution for Economic Cooperation and Development aims to conclude this summer.

But Biden has not departed from all of his predecessor’s policies totally. He has implemented the Buy American First initiative, to incentivize manufacturing in the country and to boost the overall economy as the coronavirus pandemic takes its cost on the world’s largest economic power.

In the meantime, the EU has also stepped up discussions over strategic autonomy, aiming to lessen its reliance on certain parts of the world.

“Both sides are raising their economic protection against the world succinctness. In the U.S. by new Buy America polices, for instance, and in Europe by a general campaign to wean itself off its technology dependence on the U.S.. Both sides say they yen to take trasatlanticism into a new age, but for that to happen they would first have to resolve controversial issues have a weakness for digital taxes and new technology frictions,” ECIPE’s Erixon said.

China and Russia

Carsten Brzeski, economist at ING in Germany, also said that the tariff suspension “doesn’t close that everything will be fine, there are still many stumble blocks ahead like Nordstream and how to mete out with China.”

But in the meantime, European exporters can breathe a tentative sigh of relief, at a time when the region is faade a severe economic crisis.

“Last week’s news is good news and takes away a short-term risk for the compactness we always have had to count in during the last four years,” Brzeski added.

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