US trade chief warns EU over record European Investment Bank loan to Airbus

A warning from Washington

On Monday, 26 October, US trade representative Jamieson Greer warned the European Union that a record loan from the European Investment Bank (EIB) to Airbus could put a fragile transatlantic trade truce at risk. The loan is worth $3.4 billion, and the EIB had announced it in June as a 3 billion euro facility. Greer said his office had repeatedly asked for details of the financing and still had none. He called the situation a source of considerable uncertainty for transatlantic aerospace trade and said the matter needed to be resolved as quickly as possible.

“I had sincerely hoped that trade-distorting European subsidies to Airbus were a thing of the past.”

Greer said the loan could introduce market distortions and might breach the terms of the aircraft deal reached between Washington and Brussels in 2021. He framed the risk as a possible violation of the agreement that both sides had struggled to secure.

What the loan covers

The EIB granted the loan in June, and its vice-president Ambroise Fayolle described it as a facility meant to give Airbus both the capacity and the flexibility to invest in long-term research, development and innovation. Fayolle said the money would support commercial aviation as well as security and defence. The loan is the largest in the EIB's history. Airbus has defended the arrangement as a standard corporate financing facility.

“We are actively engaging with the relevant authorities and are happy to share more information about the loan with governments.”

Airbus added that the financing was needed to manage the complexity of a high-value global production system and supply chain. The company has said it is ready to share more information with governments, while Greer's office says it has received none.

Background to the truce

A 2021 accord, reached under former US president Joe Biden, ended a dispute of 17 years over state support for Airbus and its US rival Boeing. The five-year agreement led both sides to suspend tariffs on billions of dollars of each other's goods. Neither side reimposed those tariffs this past summer, and the EU has referred to the truce as indefinitely extended. That extension formed part of a wider trade deal reached in Turnberry, Scotland, last year, which aimed to avert the worst levels of Trump's so-called liberation day tariffs. US trade officials have also complained about EU efforts to tax and regulate technology companies, as well as its corporate sustainability and supply chain rules.

Boeing and the speculation

Boeing asked the government in Washington in July to press for more transparency on the loan. The concern is fuelled by speculation that Airbus could use the money to develop a new aircraft model, a claim the sources do not confirm. Greer's office has said it has not received details despite repeated requests. The articles do not say how the funds would be used.

What comes next

Greer's statement called for the matter to be cleared up as soon as possible, so that aircraft production stays market-oriented and the aircraft agreement is not breached. Brussels aims to become less dependent on China and the United States in critical technologies. It also wants to keep industrial value creation inside the single market. Brussels is keen to tamp down trade tensions while diversifying its supply chains, and it also wants to keep the US engaged in Ukraine.