United States and EU Reach Agreement to Address Shared Challenges from China

At the outset of his trip, the President was clear that his goal was to demonstrate the capacity of democracies to both meet the challenges and deter the threats of this new age. And, he was clear that he wanted to demonstrate that the United States could lead the world’s democracies in a foreign policy for the middle class. Today’s announcement that the US and European Union (EU) have reached an agreement in the Boeing-Airbus dispute and agreed to address shared challenges from China does just that. The US and EU will suspend tariffs for five years and work together to challenge and counter China’s non-market practices in this sector in specific ways that reflect our standards for fair competition. This includes collaboration on inward and outbound investment and tech transfer.  

Today’s agreement represents a model the US can build on for other challenges posed by China. The President routinely says that we are strongest when we work with our friends and allies — today’s announcement is a demonstration of that in action. 

And, this deal will shore up the longer-term competitiveness and innovation of a key sector that is one of most important sources of middle-class jobs at home. The aerospace sector employs over 500,000 workers directly and supports over 700,000 jobs in related industries. Boeing itself employs over 140,000 workers across all 50 states. Through its supply chain, it purchases over a billion parts from over ten thousand American businesses.

The US and the EU are home to 780 million people who share democratic values and the largest economic relationship in the world. Together, we wrote the rules of the road based on democratic values, fair competition, and transparency after World War II and we need to work together to update these rules. This announcement comes on the day of the US-EU Summit, an opportunity to rebuild U.S.-EU ties, raise the ambition of the relationship, and commit to working together on the global stage.

The United States and the European Union agreed to a framework to promote a level playing field, overcome longstanding differences, and address common challenges — including our shared concerns with China’s unfair and coercive economic practices. The strengthening of our trade and investment relationship with the European Union is a top priority for the Administration, and our early efforts have been successful.

Both sides agreed to the following general principles to guide their future cooperation:

Suspend the tariffs related to this dispute for five years. This signals a mutual determination to embark on a fresh start in the relationship. The agreement also retains flexibility for the United States to reapply tariffs if we’re no longer competing on a level playing field. 

Establish a Working Group to analyze and overcome any disagreements that may arise between the sides. The Working Group will collaborate on and continue discussing and developing these principles and appropriate actions. The Trade Ministers leading the Working Group will consult at least yearly. The Working Group will meet on request or at least every 6months.

Ensure that our workers and industries can compete on a level playing field. The U.S. and EU agreed to clear statements on acceptable support for large civil aircraft producers that affirm the outcomes of the disputes and the intention of the parties to ensure that our workers and industries can compete on a level playing field.

Confront the threat we face from China’s ambitions to build a sector upon non-market practices, including:

  • Meaningful cooperation on countering (1) investments in the EU and the United States by non-market actors, which can lead to the appropriation of technology; and (2) outward investments into China that are influenced by non-market forces. 
  • Identifying where joint work is needed to take parallel action against non-market practices.
  • Sharing information regarding these and other areas to forge a common approach in the large civil aircraft sector.

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