LONDON – The French Finance Minister Bruno Le Maire thinks that the United States and the European Union can come to a compromise over trade sanctions imposed on Boeing and Airbus.
“I think that a compromise can be reached in the coming weeks, there is a possibility to build an agreement between the US and Europe on this Airbus-Boeing case,” Le Maire said in an interview with CNN.
Continued financial infighting has occurred over the last few weeks as sanctions have been ping-ponging across the Atlantic.
Earlier this week, the European Union stated that it would impose tariffs valued at $4 billion on U.S imports, which was seen as retaliation for American subsidies given to Boeing.
The EU was expecting an improvement in talks with the United States government, especially with the election of new US President Joe Biden. This 16-year dispute continued further when the United States decided to place tariffs on US$7.5bn worth of EU products, which affected Airbus.
“This Airbus-Boeing case is a very old case. The U.S. administration has decided to hit Europe with a sanction of $7 billion, so we had no choice but to respond to this sanction. This was the normal scenario”, Le Maire added.
President-elect Biden Key To Stopping This?
With Le Maire committed to bringing such disputes to an end, he is also more hopeful that a new relationship can be forged between the two institutions.
“We need to move away from sanctions. The election of President Biden will be a new start in the relationship between Europe and the United States”, he said. But even with President-elect Biden stepping into office in January, there will be a considerable amount of work to do.
Le Maire stated he does not underestimate the difficulties of bridging the gap, but is happy to compromise which will benefit both sides.
Two Major Cases This Year
Following the World Trade Organisation (WTO) ruling two years ago that no illegal subsidies were handed to Airbus, the European manufacturer has taken to the stage in two ways over the course of this year.
Firstly, the manufacturer was able to bring the dispute with Boeing at the WTO to an end, as well as filing its own counter-claim.
Last month saw the WTO then rule in favor of Airbus, meaning that a new set of tariffs worth US$4bn per year can be imposed by the European Union. This particularly affects Boeing and its sales of 737 MAX aircraft.
Is This One of the Reasons for the 737 MAX Relaunch Expedition?
The EU could impose a 15% increase in the price of the next aircraft deliveries for American carriers, meaning that the U.S will no doubt pay more.
Such a principle applies the same for European customers who buy the Boeing 737 MAX, and with recertification of the aircraft looking close, it is in Boeing’s interest to deliver as many units of the aircraft as possible before it costs more.
This could be one of the reasons why the American giant is looking to get the aircraft back into service as soon as feasibly possible, as it will cause more financial damage to the program, especially with the MAX crisis also taking a hold on finances.
Then again, the US Government will no doubt continue to fight with the WTO, claiming that the EU had no legal basis to impose such tariffs on the aircraft dispute, and hope for the best.
A few things now have to be seen in order for a potential compromise to be met. The first will be the change in political approaches to a deal being made.
President Trump will have to continue his term in office before the President-elect Biden is inaugurated into the White House. This will represent a change in trade policy from one of isolationism to one of preference to mass markets like the EU’s.
We will also have to see what appeals will be made to the WTO and whether they are at all successful, but it can be imagined that if the relationship between Biden and the EU is more positive than that of Trump’s, then the appeals may be dropped if a deal is made.
Featured Image: Photo of French Finance Minister Bruno Le Maire. Photo Credit: Gala