US, EU aerospace rivals unite to save tariff-free aircraft trade

A provisional deal between the United States and European Union to exempt aircraft from tariffs avoids a potential threat to jet production and deliveries in both regions and caps months of uncharacteristic unity among plane-making rivals.

- TIM HEPHER DAVID SHEPARDSON RAJESH KUMAR SINGH

The framework deal, announced on Sunday, will see the US impose a 15% import tariff on most EU goods but offer protection for industries including aerospace, with zero-for-zero tariffs on aircraft and parts, European officials said.

Following intense lobbying, it spares an industry that is often a lightning rod for trade tensions, with the World Trade Organization tested to its limits by a 17-year dispute over Airbus and Boeing subsidies before a truce in 2021.

Aircraft, engines, spare parts, and components from landing gear to seats had faced potentially higher costs and some jet deliveries looked set to be disrupted by the threatened US tariffs that would have compounded supply chain problems.

Still, questions remain over detailed implementation of the deal and whether it will extend to other components like space.

“We are just waiting until we see these things written down,” one European industry official told Reuters.

Airbus said it had taken note of the deal.

“A stable and predictable trade environment is essential for our highly integrated global aerospace industry,” it said.

Boeing had no immediate comment.

UNITED CAMPAIGN

Sunday's agreement follows a discreet and unusually united campaign to revert to a landmark 1979 agreement between over 30 nations that mandated duty-free trading in civil aircraft.