European Union leaders and President Joe Biden will commit to ending outstanding trade battles when they meet next week and promise to remove tariffs related to a steel and aluminum conflict before the end of the year.
That is according to a draft of the conclusions seen by Bloomberg News ahead of an EU-U.S. summit in Brussels on June 15.
It spells out that the allies will agree to resolve disagreements, including a nearly two-decade old aircraft dispute next month that came to a head under the Trump administration and contributed to more than $18 billion in U.S. and EU exports subject to painful levies.
The Americans and Europeans will pledge to finding a solution to the aircraft issue—which involves illegal government aid provided to Boeing Co. and Airbus SE—before July 11, according to the draft, which is still subject to changes. The U.S. and EU had already agreed to suspend their aircraft tariffs until July to facilitate a settlement.
This version of the summit conclusions has been seen by both the EU and U.S., which means it’s more reflective of the final outcome than earlier drafts.
Aircraft Fight
In 2019, the World Trade Organization authorized the U.S. to level tariffs against $7.5 billion of EU exports annually over state support for Airbus, while the EU won permission to hit back with levies on $4 billion of U.S. goods.
The two sides will also work toward rolling off tariffs in the steel and aluminum dispute before Dec. 1, according to the draft. In 2018, the U.S. imposed levies on metals exports from Europe on national-security grounds. The EU retaliated by targeting 2.8 billion euros ($3.4 billion) of American imports with tariffs on a range of big-brand products, including Harley-Davidson Inc. motorcycles, Levi Strauss & Co. jeans and bourbon whiskey.
Boeing shares were up 0.5% after erasing an earlier decline. Harley-Davidson increased as much as 3.2% and Levi climbed 2.2%.
“We should finally put ongoing disputes, of which unfortunately there are some, behind us,” German Foreign Minster Heiko Maas told reporters Tuesday. “We are now making progress in some areas: the moratorium on punitive tariffs from the Airbus-Boeing dispute and the EU decision against responding in kind to the measures in the dispute over steel and aluminum tariffs.”
Tech Partnership
The U.S. and the EU will also announce a partnership aimed at reinforcing the supply of semiconductors in both regions. The plans are part of a broader EU-U.S. platform to collaborate on digital issues called the Trade and Technology Council, which both sides are set to formally agree on at the summit.
“We commit to building an EU-U.S. partnership on the rebalancing of global supply chains in semiconductors with a view to enhancing EU and U.S. respective security of supply,” the draft says, adding they will also look to support the design and production of the most powerful and resource efficient semiconductors.
The allies are both racing ahead with strategies to boost semiconductor production at home as other regions, including China, look to bolster their home-grown industries. The efforts by the EU and U.S. aim to reduce reliance on manufacturers in Asia as a global chip shortage has highlighted the world’s dependence on the region for critical components that power everything from smartphones to connected cars.
The Trade and Technology Council, which aims to “avoid new technical barriers to trade,” among other goals, will also include working groups on artificial intelligence, export controls and investment screening, according to the draft.
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