NATO: Joe Biden greets President Erdogan at Brussels summit
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For nearly 17 years, the EU and US had lashed out at each other with tariffs due to issues around aircraft subsidies. Since 2004, the World Trade Organisation (WTO) found Airbus and Boeing received billions of dollars in unfair subsidies.
Both the EU and US have since imposed measures on a number of other industries, including motorcycle makers to cheese.
Former President Donald Trump imposed duties worth $7.5 billion on European products after the WTO ruling.
Last year, the body gave the EU permission to impose tariffs on $4 billion of US goods over the row.
In total the tariffs cover trade worth $11.5 billion and businesses have paid an estimated $3.3 billion in duties.
But after an EU and US summit on Tuesday, tariffs on $11.5 billion of goods from EU cheese and wine to US tobacco and spirits are now suspended for five years.
The US President, who attended the summit, said news of the tariff suspension shows the strong relationship between Brussels and Washington.
He said: “I’ve been making the case that the US and Europe – and democracies everywhere – are stronger when we work together to advance our shared values like fair competition and transparency.
“Today’s announcement demonstrates exactly how that can work in practice.”
He added: “Significantly, 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.”
The two sides will continue to work to reach agreement on the overarching subsidies dispute.
Ursula von der Leyen, European Commission President, also hailed the five-year suspension as a “major step in resolving the longest trade dispute in the history of the WTO”.
She said: “I am happy to see that after intensive work between the European Commission and the US administration, our transatlantic partnership is on its way to reaching cruising speed.
“This shows the new spirit of cooperation between the EU and the US and that we can solve the other issues to our mutual benefit.
“Together we can deliver for our citizens and businesses.”
At a subsequent press conference, von der Leyen added: “The agreement we found now really opens a new chapter in our relationship, because we move from litigation to cooperation.”
US trade representative Katherine Tai said during a videocall Tuesday that: “Today’s announcement resolves a longstanding trade irritant in the U.S.-Europe relationship.”
She added, mentioning China: “Instead of fighting with one of our closest allies, we are finally coming together against a common threat.”
However, a tariff dispute introduced by Mr Trump on steel and aluminium imports is still in place, and is backed by many US metal producers and workers.
The UK is also hoping for a similar deal suspending tariffs with the EU within days.
Both Boeing and Airbus said they welcomed the truce, with Airbus saying the agreement “will provide the basis to create a level-playing field which we have advocated for since the start of this dispute”.
It comes as Mr Biden has arrived in Geneva ahead of his summit with Russian President Vladimir Putin.
Air Force One flew in from Brussels, landing at Cointrin airport on Tuesday afternoon.
Upon landing, Mr Biden told reporters “I’m always ready”, with the President’s meeting on Wednesday.
Talks at La Grange villa are expected to start at around 1:00 pm (1100 GMT) and last as long as five hours.
A senior US official told the Deccan Herald: “There will be no breaking of bread.”
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