The United States and the European Union have agreed on a five-year suspension in tit-for-tat tariffs over a 17-year-long trade dispute that involved subsidies given to Boeing and Airbus for airplane development. The deal, announced today during President Joe Biden’s meetings with EU leaders in Brussels, heads off billions of dollars in duties that could have affected a wide range of products — although U.S. Trade Representative Katherine Tai said the tariffs could be reactivated if “U.S. producers are not able to compete fairly.”
Warnings about the potential perils of foreign alliances go back to George Washington’s Farewell Address — but in the Space Age, the issues surrounding international relations are much more nuanced.
At least that’s the view from Christopher Richins, the founder and CEO of Redmond, Wash.-based RBC Signals.
RBC Signals acts as a broker for global satellite connectivity services, and counts the U.S. government among its customers. But because RBC’s business model relies on partnerships with satellite ground stations around the world, RBC has to work with countries that the U.S. government views as rivals on the space frontier — specifically, Russia and China.
“You don’t have to have the U.S. government as a customer,” Richins told GeekWire. “But if you do intend to at some point, being mindful of things like cybersecurity and management structure, knowing your customers and knowing your investors — all of those things will serve you well in removing some of the potential barriers to entry for getting those opportunities.”
The troubles encountered by Momentus Space, one of RBC Signals’ customers, serve as a cautionary tale. The space-tug startup’s planned merger with a blank-check company, Stable Road Acquisition Corp., has been held up because of U.S. government concerns about Momentus’ Russian co-founders. Moreover, Momentus’ plans for its first launch have been stymied by the Federal Aviation Administration for similar reasons.
With Boeing’s blessing, Washington state lawmakers have introduced bills aimed at suspending tax breaks that have benefited the aerospace company to the tune of millions of dollars annually.
After months of negotiations, Boeing and Brazilian jetmaker Embraer today announced a tentative agreement to form a $4.75 billion joint venture that would bring Embraer’s small-size commercial aircraft operations firmly into Boeing’s fold.
The arrangement is a strategic parry to last year’s move by Boeing’s European archrival, Airbus, to partner with Canada’s Bombardier on small-size jets.
Embraer’s engineering expertise could also come into play as Boeing gears up to design and produce a new breed of midsize jet variously known as the New Mid-Market Airplane, NMA or 797.
“This important partnership clearly aligns with Boeing’s long-term strategy of investing in organic growth and returning value to shareholders, complemented by strategic arrangements that enhance and accelerate our growth plans,” Dennis Muilenburg, Boeing’s chairman, president and CEO, said today in a news release.
The World Trade Organization today issued its final report in a long-running dispute over subsidies for Airbus jets, potentially clearing the way for the U.S. to levy harsh tariffs on European imports.
It’s more likely, however, that U.S. and European officials will bear down on negotiations over complaints that also touch on the Boeing Co.’s tax breaks from Washington state.
Today’s WTO appellate panel ruling determined that Airbus received improper loan subsidies from European governments to launch its A350 and A380 jets. Similar claims, relating to the A320 and A330 lines, were dismissed.
In a statement, U.S. Trade Representative Robert Lighthizer said the ruling “confirms once and for all that the EU has long ignored WTO rules.”
“Unless the EU finally takes action to stop breaking the rules and harming U.S. interests, the United States will have to move forward with countermeasures on EU products,” Lighthizer said.
Boeing CEO Dennis Muilenburg said the ruling affirmed his company’s complaints. “Today’s final ruling sends a clear message: disregard for the rules and illegal subsidies is not tolerated,” he said in a statement.
China took less than 24 hours to respond to proposed U.S. tariffs with a 106-item list of its own that could affect $50 billion worth of U.S. imports, potentially including some of Boeing’s 737 airplanes.
The impact on Boeing isn’t yet clear, and the tit-for-tat trade sanctions on aerospace goods have not yet been implemented. Hours after China announced its move, Boeing issued a statement voicing hope that Washington and Beijing will be able to avoid a trade war.
The Office of the U.S. Trade Representative today rolled out a list of $50 billion worth of Chinese-made goods that could be hit by import tariffs, marking the latest volley in what some fear could turn into a trade war.
The items range from components for spacecraft and aircraft, to robots and other industrial tools, to pharmaceuticals and medical supplies, to television sets, dishwashers and even sewing machine needles.
The 45-page, 1,300-item list was developed as a response to what the Trump administration says are China’s efforts to take unfair advantage of technologies and intellectual property developed in the U.S. Listed items could be subject to an added import duty of 25 percent.
Canadian airplane maker Bombardier scored an unexpected victory today over Boeing when the U.S. International Trade Commission unanimously rejected a plan to levy a 292 percent tariff on the company’s U.S. sales.
In a statement, the commission said it determined that U.S. industry “is not materially injured or threatened with material injury” by imports of Bombardier’s 100- to 150-seat CSeries jets.
That runs counter to Boeing’s claim that Bombardier’s Canadian government subsidies would threaten its sales of 737 jets. The U.S. Commerce Department sided with Boeing and called for the tariff, but it was up to the ITC to approve the penalty.
The decision suggests that Bombardier’s multibillion-dollar sale of up to 125 single-aisle CS100 jets to Delta Air Lines, announced last April, will go forward.
The U.S. Commerce Department says its tariffs on imported Canadian jets will add up to 292.21 percent, marking another escalation in a trade battle involving Boeing and Canada’s Bombardier.