Europe and the US have suspended retaliatory tariffs in a dispute over airline subsidies

The European Union and the United States will suspend their retaliatory tariffs for 4 months in a dispute over subsidies for large civil aircraft, the two sides said in a joint statement Wednesday.

EU Commission President Michel von der Leyen made the statement after a phone call with US President Joe Biden on Friday. It was the first phone call between the president of the European Commission and the US president since Biden took office.

Ms von der Leyen said the call with Mr Biden was "the beginning of a good personal partnership" and a positive sign for future US-European economic co-operation. The White House said it was an opportunity to "repair and reinvigorate the US-European partnership".

The announcement follows a joint statement by the United Kingdom and the United States on Thursday that the two countries would suspend their retaliatory tariffs in a subsidy dispute between Airbus and Boeing.

America's dispute with Britain and the European Union over airline subsidies dates back to 2004. The World Trade Organization has ruled that the United States and European countries are providing illegal subsidies to their airlines. In October 2019, the WTO authorized the US to retaliate by imposing tariffs and other measures on about $7.5 billion of EU goods and services annually. In October 2020, the WTO authorized the EU to impose tariffs on up to $3.99 billion a year of goods and services from the United States.