US Warns EU Airbus Loan Could Undermine Trade Truce

US trade representative Jamieson Greer warned that the EU's $3.4 billion loan to Airbus could undermine the trade truce between Washington and Brussels and revive a transatlantic trade war. Greer accused the European Investment Bank of failing to provide details about the June loan despite repeated requests. Greer expressed concern that the financing could distort markets and violate the aircraft subsidy agreement. The loan was the largest the European Investment Bank has ever made.

Greer said he had hoped Europe had stopped providing trade-distorting subsidies to Airbus. Greer accused France, Germany and Spain of supporting Airbus for decades to secure an unfair advantage over US aerospace workers and businesses.

Airbus described the loan as a standard corporate financing facility needed to manage the complexity of a high-value global production system and supply chain. Airbus said the company was engaging with the relevant authorities and was willing to provide governments with further information about the loan.

The US and EU reached an agreement on subsidies to Airbus and Boeing in 2021 under former US president Joe Biden. The agreement ended a 17-year dispute that had prompted tariffs on billions of dollars of goods traded between the two sides. The accord covered five years. Neither side reinstated the tariffs this past summer. The EU described the aircraft truce as extended indefinitely under the broader trade agreement intended to avoid Trump's highest tariffs.

US trade officials have also objected to European measures to tax and regulate technology companies and to corporate sustainability and supply chain regulations. Brussels wants to ease trade tensions while diversifying supply chains. Brussels also wants the US to remain engaged in Ukraine. European policymakers are seeking less reliance on US technology because of concerns about Trump's unpredictability.

The US and EU reached the broader trade agreement in Turnberry, Scotland, last year to avoid the highest tariffs in Trump's so-called liberation day programme. The US Supreme Court ruled against most of Trump's tariffs earlier this year. Duties on most EU goods have nevertheless remained at 10%. Cars and car parts face a 15% tariff. Steel and aluminium face a 50% tariff.

The US ambassador to the EU warned earlier this month that European companies could face devastating retaliation from Washington if Brussels restricted US rivals' access to European markets. The warning concerned plans affecting companies such as Elon Musk's SpaceX.

The Office of the US Trade Representative is also investigating the EU in an ongoing industrial overcapacity probe expected to result in steep tariffs. Tariffs affecting several countries were expected to be announced earlier this year. Those tariffs have not yet been announced.