President Joe Biden on Tuesday moved to end a long-running dispute with the European Union over subsidies for aircraft manufacturers, a major breakthrough in the U.S.-EU trade relationship that comes on the eve of his highly anticipated meeting with Russian President Vladimir Putin.
The announcement that the two sides reached resolution in a 17-year dispute over how much of a government subsidy each can provide for its aircraft manufacturing giant — Boeing in the United States and Airbus in the EU.—came as Biden met with European Council President Charles Michel and European Commission President Ursula von der Leyen.
With the move, Biden eases a major point of tension in the trans-Atlantic relationship at a moment he’s seeking to marshal widespread European support for his efforts to counter Russia prior to his Wednesday meeting in Geneva with Putin.
U.S. Trade Representative Katherine Tai told reporters that the agreement calls for a five-year suspension of the aircraft tariffs, and stressed that it was time to put aside the fight and focus on China's economic assertiveness.
“Today’s announcement resolves a longstanding trade irritant in the U.S.-Europe relationship. Instead of fighting with one of our closest allies, we are finally coming together against a common threat,"" Tai said. “We agreed to work together to challenge and counter China’s non-market practices in this sector in specific ways that reflect our standards for fair competition. “
She added that the tariffs could be reimplemented if the U.S. determines U.S. companies are not able to “compete fairly” with the EU’s. The tariffs had been temporarily suspended on March 11 for four months, and the new agreement will officially go into effect on July 11.
To be certain, the U.S.-EU relationship faces other trade-related friction. The continent’s leaders are becoming impatient that Biden has not yet addressed Donald Trump’s 2018 decision to impose import taxes on foreign steel and aluminum.
Even without resolving all trade disputes, White House officials expressed confidence that they can build more goodwill with Europe ahead of the face-to-face meeting with Putin.
The White House on Tuesday announced the creation of a joint U.S.-EU trade and technology council.
The council will work on coordinating standards for artificial intelligence, quantum computing and bio-technologies, as well as coordinating efforts on bolstering supply chain resilience. Biden is appointing Secretary of State Antony Blinken, Commerce Secretary Gina Raimondo and Tai to co-chair the U.S. side of the effort.
The White House said the two sides will also discuss efforts to stem climate change and launch an expert group to determine how best to reopen travel safely as the coronavirus pandemic ebbs.
Biden started his day by meeting with Belgian King Philippe and Belgian Prime Minister Alexander De Croo.
The U.S.-EU summit is also expected to include a communique that will address concerns about China’s provocative behavior.
That statement would follow a NATO summit communique on Monday that declared China a constant security challenge and said the Chinese are working to undermine the global rules-based order. On Sunday, the Group of Seven nations called out what it said were China's forced labor practices and other human rights violations against Uyghur Muslims and other ethnic minorities in the western Xinjiang province.
Biden is also expected to spend time discussing Russia with Michel and von der Leyen ahead of Wednesday's summit with Putin.
Since taking office in January, Biden has repeatedly pressed Putin to take action to stop Russian-originated cyberattacks on companies and governments in the U.S. and around the globe and decried the imprisonment of Russian opposition leader Alexei Navalny. Biden also has publicly aired intelligence that suggests — albeit with low to moderate confidence — that Moscow offered bounties to the Taliban to target U.S. troops stationed in Afghanistan.
Both Biden and Putin have described the U.S.-Russia relationship as being at an all-time low.
The Europeans are keen to set up a “high-level dialogue” on Russia with the United States to counter what they say is Moscow’s drift into deeper authoritarianism and anti-Western sentiment.
At the same time, the 27-nation bloc is deeply divided in its approach to Moscow. Russia is the EU’s biggest natural gas supplier, and plays a key role in international conflicts and key issues, including the Iran nuclear deal and conflicts in Syria and Libya.
The hope is that Biden’s meeting with Putin might pay dividends, and no one in Brussels wants to undermine the show of international unity that has been on display at the G-7 and NATO summits, according to EU officials.
In addition to scolding China, NATO leaders in their communique on Monday took a big swipe at Russia, deploring its aggressive military activities and snap wargames near the borders of NATO countries as well as the repeated violation of the 30-nations’ airspace by Russian planes.
They said Russia has ramped up “hybrid” actions against NATO countries by attempting to interfere in elections, political and economic intimidation, disinformation campaigns and “malicious cyber activities.”
“Until Russia demonstrates compliance with international law and its international obligations and responsibilities, there can be no return to ‘business as usual,'" the NATO leaders wrote. “We will continue to respond to the deteriorating security environment by enhancing our deterrence and defense posture.”