US warns $3.4 billion Airbus loan could threaten tariff truce with EU

U.S. Trade Representative Jamieson Greer pressed the EU for more information on the loan in a statement October 26, saying his office still has no details on what he called the bank's "largest loan ever." Greer warned it risks violation of the terms of the 2021 Large Civil Aircraft deal, which paused tariffs on roughly $11.5 billion of goods.

The dispute over aircraft subsidies dates back to the 1990s and led to a 17-year WTO battle. In 2021, the U.S. and EU reached a truce suspending retaliatory tariffs, which was extended in July 2026 after the European Parliament approved a broader trade deal setting a 15% tariff rate and committing Europe to invest in U.S. projects. That broader deal now could be jeopardised by the loan dispute.

Boeing had requested the U.S. government press for transparency on the loan in July, with speculation it could be used to develop a new jet model. Greer said he had hoped that “trade-distorting European subsidies to Airbus were a thing of the past.” The EIB, which made the loan in June, did not respond to Fortune’s request for comment. Airbus also did not respond to Fortune’s request for comment.

The unwinding of the trade agreement could mean tariffs revert to 30% and could possibly trigger the EU's massive retaliation package, impacting more than $100 billion of U.S. goods. Marc Busch, a professor of international business diplomacy at Georgetown University, said Europe is unlikely to back down, noting Airbus provides 135,000 European jobs and derives about a third of its revenue from Europe. “There’s no way Europe backs away from this one. Airbus is real. It’s not a little sideshow,” Busch told Fortune.

Busch said the best outcome would be for the EIB to open its books and show the loan is similar to previous ones. At worst, the situation could escalate U.S.-EU tensions. If the Trump administration took issue with the loan, it could impose Section 301 tariffs on the EU, which could be WTO-authorized if the EU violated aircraft subsidy rules. Busch called the prospect an irony given President Donald Trump's previous criticism of the WTO. “It would be quite something,” Busch said, “to imagine the ceasefire ends, we reimpose the Airbus tariffs, and Trump can—for the first time—get up in front of the camera and say these tariffs are WTO-authorized.”