The U.S. and Britain end their aircraft subsidy dispute, mirroring an E.U. deal.

By Eshe Nelson

The United States and Britain have agreed to end a long-running trade spat over aircraft subsidies, and not impose certain retaliatory tariffs for five years, the nations announced on Thursday.

The tariffs related to a 17-year dispute between the United States and the European Union over subsidies for Boeing and Airbus, and over much of that time, Britain was a member of the bloc. The agreement mirrors one reached between the United States and European Union on Tuesday.

The pact announced on Thursday also said the two nations would work together to “address the challenge posed by nonmarket economies, such as China” in the civil aircraft sector. China has built a state-sponsored aerospace manufacturer, Commercial Aircraft Corporation of China, to compete with Boeing and Airbus.

Britain and the United States agreed to explore a coordinated approach to screen investments in the aircraft industry financed by China and other nonmarket economies. These investments could lead to “appropriation of critical technologies,” and potential national security risks, a joint statement published by the British government on Thursday said. The two countries also plan to cooperate on an approach to screen investments by British or U.S. companies in China, like joint ventures and the development of production facilities.

Last week, President Biden and Prime Minister Boris Johnson of Britain revived the 80-year-old Atlantic Charter to signal their eagerness to work together on major issues including climate change, cybersecurity and autocratic governments such as China.

The agreement to end of the aircraft dispute “strengthens our special relationship and builds on the revitalized Atlantic Charter, which affirms our ongoing commitment to sustaining and defending our enduring values against new and old challenges,” the joint statement said.

In March, the United States suspended retaliatory tariffs against Britain for four months to work out a longer-term solution to the aircraft dispute. This would support British producers in several industries, but especially Scotch whisky, which faced a 25 percent tariff in the United States.

Britain had already suspended its own retaliatory tariffs in January, after it left the European Union’s single market and customs union. This decision essentially separated Britain from the dispute between the European Union and the United States, as the British government was trying to smooth over its relationship with the new Biden administration, with the eventual goal of securing a free-trade agreement.

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