Politics

The US slapped tariffs on the EU, but they've also started talking about Airbus and Boeing

Key Points
  • In an email to CNBC, the European Commission confirmed the phone call saying the two spoke regarding the Airbus and Boeing cases at the World Trade Organization (WTO).
  • Last week's phone call also took place at a time when the U.S. administration will decide whether to impose extra tariffs on European carmakers.
European Commissioner for Trade Cecilia Malmstrom (R) and US trade representative Robert Lighthizer (L) arrive for a meeting for talks after US President imposes tariffs of 25 percent on steel and 10 percent on aluminum, on March 10, 2018 at the European Commission headquarters in Brussels.
STEPHANIE LECOCQ | AFP | Getty Images

The early signs of an intense trade conflict between the U.S. and the EU may have appeared this month, but the two sides have also quietly started talking in a bid to resolve certain issues.

EU Trade Commissioner Cecilia Malmstrom and Robert Lighthizer, the U.S. trade representative, "had a call last Thursday" where they took stock of the issues dividing the two, one European official, who is aware of the discussions but didn't want to be named due to their sensitive nature, told CNBC Wednesday. 

"No breakthrough, but good to talk. We still want to find a negotiated solution," the official told CNBC.

In an email to CNBC, the European Commission confirmed the phone call saying the two spoke regarding the Airbus and Boeing cases at the World Trade Organization (WTO). "Commissioner Malmström reiterated the EU's desire to find a negotiated solution," a spokesperson for the Commission said Thursday morning.

The phone call marked the first conversation between both sides after the U.S. announced tariffs on $7.5 billion of European goods earlier this month. The U.S. had complained more than a decade ago that European countries were giving unfair subsidies to Airbus — which was causing losses on its U.S. rival Boeing. The WTO recently ruled in favor of Washington which paved the way for the tariffs on EU goods.

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The EU has made a similar complaint to the WTO, arguing that the U.S. has subsidized Boeing illegally. However, the WTO has yet to rule on this case which could happen in the first half of 2020. In this context, the EU has asked the U.S. to discuss both cases in order to come up with a solution that would avoid tariffs altogether. But the U.S. forged ahead with the new duties regardless.

Last week's phone call also took place at a time when the U.S. administration will decide whether to impose extra tariffs on European carmakers. U.S. Commerce Secretary Wilbur Ross told the Financial Times last week that new talks with Europe could be an alternative to imposing these new duties next month.

President Donald Trump has argued that some imported vehicles and car parts from Europe posed a national security threat to the U.S. and, as such, Washington should impose higher costs on these products.

At the time, Malmstrom said: "We completely reject the notion that our car exports are a national security threat. The EU is prepared to negotiate a limited trade agreement (including) cars, but not WTO-illegal managed trade."

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The trade relationship between the U.S. and the EU has been tense since Trump came to power and voiced his disapproval of multilateral deals. Last year, he announced steel and aluminum tariffs on Europe. The EU retaliated a few months later with duties on 2.8 billion euros of U.S. goods.