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FlyHPN
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EU, U.S. Agree to Five-Year Truce in Boeing-Airbus Trade Dispute

Tue Jun 15, 2021 11:34 am

Good for both sides IMO, but it seems like the US a leg up in that they have the right to pull the plug if the EU “crosses the line” with continued forbidden aid.

https://www.bloomberg.com/news/articles ... de-dispute

Some interesting quotes

Under the Airbus-Boeing deal, all future passenger aircraft will be required to be developed without subsidies, the officials said.


The agreement was driven, in part, by a growing awareness among policy makers in Brussels and Washington that China’s state-sponsored aerospace manufacturer Commercial Aircraft Corp. of China, or Comac, is on track to become a legitimate rival in global planemaking by the end of the decade.
 
fpetrutiu
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Re: EU, U.S. Agree to Five-Year Truce in Boeing-Airbus Trade Dispute

Tue Jun 15, 2021 12:31 pm

This makes no sense to me. If the concern is keeping China out, shouldn't the agreement allow subsidies in equal amount to spur the development of new cutting edge airliners that China couldn't compete with?
Florin
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frmrCapCadet
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Re: EU, U.S. Agree to Five-Year Truce in Boeing-Airbus Trade Dispute

Tue Jun 15, 2021 12:34 pm

I still think that the new cockpit would benefit by some US/EU/UK subsidies and direction. Possibly even direct R&D.
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MIflyer12
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Re: EU, U.S. Agree to Five-Year Truce in Boeing-Airbus Trade Dispute

Tue Jun 15, 2021 12:35 pm

The New York Times quotes Katherine Tai, U.S. Trade Representative:

But she said the agreement set limits on the subsidies that the European Union would be allowed to provide to Airbus, and she warned that the United States would reimpose billions of dollars in tariffs if subsidies by European Union countries crossed a “red line.”

“These tariffs will remain suspended, so long as E.U. support for Airbus is consistent with the terms of this agreement,” she said. “Should E.U. support cross the red line, and U.S. producers are not able to compete fairly and on a level playing field, the United States retains the flexibility to reactivate the tariffs that are being suspended.”


It might be interesting to see just what that red line is, and how blurry.

https://www.nytimes.com/2021/06/15/worl ... e=Homepage
 
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ClipperMonsoon
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Re: EU, U.S. Agree to Five-Year Truce in Boeing-Airbus Trade Dispute

Tue Jun 15, 2021 2:47 pm

Good for both sides, level competition is a good thing, because A and B are competitors does not mean they should operate as enemies, glad these grown ups could put aside childlike behavior, these tariffs were affecting more than just aviation, well done to the U.S and to the E.C.
 
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Revelation
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Re: EU, U.S. Agree to Five-Year Truce in Boeing-Airbus Trade Dispute

Tue Jun 15, 2021 2:52 pm

ClipperMonsoon wrote:
Good for both sides, level competition is a good thing, because A and B are competitors does not mean they should operate as enemies, glad these grown ups could put aside childlike behavior, these tariffs were affecting more than just aviation, well done to the U.S and to the E.C.

Yet nothing is resolved, both sides still claim the other is not in compliance with WTO rules. This is just an agreement to suspend the "relief" for five years, a classic "kick the can down the road" political move.
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Noshow
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Re: EU, U.S. Agree to Five-Year Truce in Boeing-Airbus Trade Dispute

Tue Jun 15, 2021 2:57 pm

Both sides seem to have broken the rules before and look like continuing to do so. Just looking at the climate change research billions and upgraded military research.
It is certainly right to terminate this never ending comedy but is anything solved? Will China just be ignored or is the next conflict brewing?
 
mxaxai
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Re: EU, U.S. Agree to Five-Year Truce in Boeing-Airbus Trade Dispute

Tue Jun 15, 2021 2:59 pm

fpetrutiu wrote:
This makes no sense to me. If the concern is keeping China out, shouldn't the agreement allow subsidies in equal amount to spur the development of new cutting edge airliners that China couldn't compete with?

No, if a Chinese manufacturer attempts to sell airliners in the EU or US, this would allow them to impose tariffs to keep Airbus and Boeing competitive. Based on the argument that "China subsidises COMAC but we don't subsidise Airbus or Boeing".
 
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ClipperMonsoon
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Re: EU, U.S. Agree to Five-Year Truce in Boeing-Airbus Trade Dispute

Tue Jun 15, 2021 3:04 pm

Revelation wrote:
ClipperMonsoon wrote:
Good for both sides, level competition is a good thing, because A and B are competitors does not mean they should operate as enemies, glad these grown ups could put aside childlike behavior, these tariffs were affecting more than just aviation, well done to the U.S and to the E.C.

Yet nothing is resolved, both sides still claim the other is not in compliance with WTO rules. This is just an agreement to suspend the "relief" for five years, a classic "kick the can down the road" political move.

Understood, at least placing a 5 year moratorium is a step in the right direction, hopefully something more permanent can replace the "kick the can down the road" mentality, at least they have a few years to work with, however i understand with politics, sometimes words are just words.
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MIflyer12
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Re: EU, U.S. Agree to Five-Year Truce in Boeing-Airbus Trade Dispute

Tue Jun 15, 2021 3:50 pm

mxaxai wrote:
fpetrutiu wrote:
This makes no sense to me. If the concern is keeping China out, shouldn't the agreement allow subsidies in equal amount to spur the development of new cutting edge airliners that China couldn't compete with?

No, if a Chinese manufacturer attempts to sell airliners in the EU or US, this would allow them to impose tariffs to keep Airbus and Boeing competitive. Based on the argument that "China subsidises COMAC but we don't subsidise Airbus or Boeing".


Ah, no. The U.S. and the EU can both impose tariffs on each other because they won their respective cases at the WTO. It took 15 years for Boeing's case against Airbus to proceed to the point where the WTO authorized tariffs. Other than by a national security declaration (used repeatedly by Trump, but very sparingly by prior administrations), one could expect a U.S. case against China to take a long, long time - and this tariff action is wholly separate from that.

https://www.reuters.com/article/wto-air ... SL2N24G18K
 
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NameOmitted
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Re: EU, U.S. Agree to Five-Year Truce in Boeing-Airbus Trade Dispute

Tue Jun 15, 2021 4:48 pm

fpetrutiu wrote:
This makes no sense to me. If the concern is keeping China out, shouldn't the agreement allow subsidies in equal amount to spur the development of new cutting edge airliners that China couldn't compete with?

Other news sources (sorry, I've read a lot and can't remember which) point out that WTO rules don't require punitive tariffs to be in the industry where harm was found. While the cause of conflict is aerospace many tariffs are on items that have nothing to do with aircraft, such as beef and wine.

A truce here is about helping a lot of European and US industries get back up and running, not just aerospace.
 
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Nomadd
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Re: EU, U.S. Agree to Five-Year Truce in Boeing-Airbus Trade Dispute

Tue Jun 15, 2021 5:58 pm

Agreeing to "no subsidies" doesn't really mean much. Agreeing to the definition of "subsidies" is the part that matters.
 
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par13del
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Re: EU, U.S. Agree to Five-Year Truce in Boeing-Airbus Trade Dispute

Tue Jun 15, 2021 10:52 pm

Both sides have their get out of jail card free, it will be interesting to see how the Feds on both sides of the pond prevent subsidies..
The EU does not prevent individual governments from "doing their own thing" and the USA Federal government cannot prevent states from doing certain things, which is where most if not all US subsidies are generated.
 
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keesje
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Re: EU, U.S. Agree to Five-Year Truce in Boeing-Airbus Trade Dispute

Tue Jun 15, 2021 11:21 pm

I think it is clear 1 of the companies might need an injection / investment to regain it's position. No fights in the next 5 years helps.
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zeke
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Re: EU, U.S. Agree to Five-Year Truce in Boeing-Airbus Trade Dispute

Thu Jun 17, 2021 2:16 am

fpetrutiu wrote:
This makes no sense to me. If the concern is keeping China out, shouldn't the agreement allow subsidies in equal amount to spur the development of new cutting edge airliners that China couldn't compete with?


This has just about gone full circle, years ago the US and the EU had an agreement on large regarding civil airliners, Airbus started to get too big under that agreement so the US pulled out of the agreement and took the EU to the WTO for following what was in their agreement.

Prior to the deal being canceled the US was sanctioned a few times regarding dodgy tax avoidance on aircraft during delivery.

In reality what was happening in recent times is governments like Japan were giving major subsidies to local manufacturers to build large packages for Boeing aircraft, if you look at reduction in US content in their new aircraft most of the shift went to Japan and Korea. The US never took those countries to the WTO when they were the ones directly responsible for the downsizing in Boeing as those subsidies kept the completed Boeing product competitive.

This all worked well until Airbus setup multiple production lines in the US, now Airbus can go to the US government and ask them to take Japan and Korea to the WTO over their subsidies as the subsidies hurts their domestic production in the US. The EU could not take Japan or Korea to the WTO as the parts were not being made for EU aircraft.

This new agreement essentially is another iteration of the earlier agreement on large civil airliners. The big difference this time is that Airbus is now both a manufacture in the US and the EU, the US government cannot take a future position that benefits only Boeing over Airbus, it will need to treat the domestic production equally.
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par13del
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Re: EU, U.S. Agree to Five-Year Truce in Boeing-Airbus Trade Dispute

Thu Jun 17, 2021 2:22 am

zeke wrote:
This all worked well until Airbus setup multiple production lines in the US, now Airbus can go to the US government and ask them to take Japan and Korea to the WTO over their subsidies as the subsidies hurts their domestic production in the US. The EU could not take Japan or Korea to the WTO as the parts were not being made for EU aircraft.

This new agreement essentially is another iteration of the earlier agreement on large civil airliners. The big difference this time is that Airbus is now both a manufacture in the US and the EU, the US government cannot take a future position that benefits only Boeing over Airbus, it will need to treat the domestic production equally.

Based on the tanker threads I thought it was shown that a significant percentage of Airbus parts was made in the USA, and that Airbus wanted US production sites to alleviate currency conversion issues, now we find out it was also related to "killing" the constant WTO conflicts.
Interesting.
 
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zeke
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Re: EU, U.S. Agree to Five-Year Truce in Boeing-Airbus Trade Dispute

Thu Jun 17, 2021 4:45 am

par13del wrote:
Based on the tanker threads I thought it was shown that a significant percentage of Airbus parts was made in the USA, and that Airbus wanted US production sites to alleviate currency conversion issues, now we find out it was also related to "killing" the constant WTO conflicts.
Interesting.


I think there are multiple reasons, including meeting the US production requirements for the coast guard and army aircraft. We also saw with the US Canada dispute, the new A220 FAL in the US bypassed those 300% tariffs as well, that was a result of Boeing complaining over Bombardier.

I remember lawmakers also wanting airlines to have the place of manufacture listed on the safety card, again in an attempt to support Boeing. The same made in the USA will need to be displayed on domestically produced A320 and A220 series.

Airbus will need all the FALs they currently have to meet their future production aim of 100+ A320 series a month.
“Don't be a show-off. Never be too proud to turn back. There are old pilots and bold pilots, but no old, bold pilots.” E. Hamilton Lee, 1949
 
LTEN11
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Re: EU, U.S. Agree to Five-Year Truce in Boeing-Airbus Trade Dispute

Thu Jun 17, 2021 6:59 am

zeke wrote:
par13del wrote:
Based on the tanker threads I thought it was shown that a significant percentage of Airbus parts was made in the USA, and that Airbus wanted US production sites to alleviate currency conversion issues, now we find out it was also related to "killing" the constant WTO conflicts.
Interesting.


I think there are multiple reasons, including meeting the US production requirements for the coast guard and army aircraft. We also saw with the US Canada dispute, the new A220 FAL in the US bypassed those 300% tariffs as well, that was a result of Boeing complaining over Bombardier.

I remember lawmakers also wanting airlines to have the place of manufacture listed on the safety card, again in an attempt to support Boeing. The same made in the USA will need to be displayed on domestically produced A320 and A220 series.

Airbus will need all the FALs they currently have to meet their future production aim of 100+ A320 series a month.


Those place of manufacture indications of course would have had to include Toulouse, Hamburg and Tianjin, the last one may have been problematic.
 
mutu
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Re: EU, U.S. Agree to Five-Year Truce in Boeing-Airbus Trade Dispute

Thu Jun 17, 2021 1:18 pm

UK and US now also in a truce on this matter
 
Prost
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Re: EU, U.S. Agree to Five-Year Truce in Boeing-Airbus Trade Dispute

Thu Jun 17, 2021 3:35 pm

So does this mean that DL no long needs to do those weird deliveries via NRT for their A350s?
 
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zeke
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Re: EU, U.S. Agree to Five-Year Truce in Boeing-Airbus Trade Dispute

Thu Jun 17, 2021 9:14 pm

Prost wrote:
So does this mean that DL no long needs to do those weird deliveries via NRT for their A350s?


I thought I read the reason for that was to reduce tax liability, there is a technical difference between importing a new aircraft vs a used aircraft. If the aircraft goes via somewhere it no longer is new, it is used.
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