'China's non-market practices': How US, EU settled Airbus-Boeing jet subsidy battle

US President Joe Biden and the European Union(EU) officials on Tuesday came together to remove tariffs on $11.5 billion goods from EU wine to US tobacco and spirits for five years as both sides decided to call a truce over the 17-year-old Airbus-Boeing dispute.

President Biden and European Commission chief Von der Leyen had earlier suspended retaliatory tariffs in the dispute over subsidies for the rival plane makers.

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The truce is set to last for five years which both sides feel is enough to resolve the conflict as they fear China has been trying to develop a rival passenger aircraft although Airbus and Boeing have factories in China.

US and EU had slapped $12 billion retaliatory tariffs on each other over American company Boeing and European aerospace company Airbus in a spat involving government subsidies even as reports said China was trying to push the “Made in China 2025” initiative with state-owned Comac aerospace set to develop a jet called C919 as a direct competition to Airbus and Boeing.

"We also agreed to work together to challenge and counter China's non-market practices in this sector that give China's companies an unfair advantage," Biden said.

The EU and US officials had earlier in March decided to suspend the tit-for-tat tariff war.

The American president quoting a poem from Easter 1916 by William Yeats said: "The world has changed, changed utterly" as Europe and the US sought to cement transatlantic ties.

"This really opens a new chapter in our relationship because we move from litigation to cooperation on aircraft," EU Commission president Von der Leyen said.

US Trade Representative Katherine Ta applauding the deal said: "This is a model that we will use to build on for other challenges posed by China and non-market economic competition."