Aircraft Dispute Still Threatens U.S. Wheat Trade with EU

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U.S. wheat farmers and customers on the other side of the Atlantic Ocean applauded a temporary truce in the tariff war between the U.S. and European Union. The cross-Atlantic dispute is centers around an unrelated case regarding aircraft subsidies. The 25 percent retaliatory tariff on U.S. hard red spring wheat imports into the U.K. and European Union are suspended for four months, temporarily reopening trade. The temporary break in the tariff comes as Katherine Tai got confirmed as the new U.S. Trade Representative. The dispute goes back to 2004 when the U.S. challenged E.U. subsidies for Airbus, and the E.U. followed suit with a challenge against certain states’ support for Boeing. After years of back and forth, the U.S. and E.U. received authorization to apply retaliatory tariffs in 2020. While the reprieve is welcomed by U.S. wheat producers, many are still cautious. Dalton Henry, Vice President of Policy for U.S. Wheat Associates, says both sides are dug in and the four-month window for the tariff suspension may not be long enough to solve the dispute. The U.K.’s recent departure from the E.U. further complicates the dispute’s outcome. The U.K. has made it clear they want the dispute resolved, offering in December to unilaterally drop its retaliatory tariffs on U.S. goods as an act of goodwill.

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