The United States and the European Union, in a joint statement released by the United States Trade Representative on March 5, announced a mutual four-month suspension of the tariffs related to the World Trade Organization (WTO) large civil aircraft disputes. The suspension will cover all tariffs both on aircraft as well as on non-aircraft products, and will become effective as soon as the internal procedures on both sides are completed.
Action item: Companies affected by these tariffs should consider modeling possible resolutions of this situation in planning their future trade between the United States and the EU.
The mutual suspensions of tariffs related to the WTO aircraft dispute appear to reflect a mutual desire to achieve a resolution of the situation in a manner that is acceptable to all parties.
While this signals a willingness by the new administration to move away from the use of tariffs as a trade tool, it may be too soon to conclude that a similar approach would be taken with regard to other tariffs currently in place. For instance, during her confirmation hearing, US Trade Representative nominee Katherine Tai said that China must live up to its Phase One trade deal commitments and that tariffs may stay in place for the foreseeable future. That said, the suspension of the US-EU-UK tariffs is a positive development for affected companies.