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US suspends tariffs on UK Goods in Airbus-Boeing dispute
The tariff suspension will last four months to “focus on negotiating a balanced settlement to the disputes”, the UK government said in a statement on Thursday.
The US will suspend retaliatory tariffs on UK products caught up in the longstanding dispute over illegal aid to Boeing Co. and Airbus SE in a boost for post-Brexit Britain’s trade agenda.
The tariff suspension will last four months to “focus on negotiating a balanced settlement to the disputes”, the UK government said in a statement on Thursday. The decision means goods like Scotch whisky, biscuits and clotted cream can be imported to the US from Britain without being subject to an additional 25% duty.
Removing tariffs on UK-US commerce has been a priority for Prime Minister Boris Johnson’s government as they seek a broader trade deal with President Joe Biden’s administration. Britain unilaterally dropped tariffs on some US products indefinitely in January in a bid to reduce trade tensions. The former Trump administration did not reciprocate the UK’s concession.
The US’s temporary rollback could help resolve part of the World Trade Organization dispute over the aid to Boeing and Airbus, which has resulted in WTO-authorized tariffs targeting nearly $12 billion worth of transatlantic trade.
The dispute, which has dragged on for 17 years, involves the US and the four European countries that manufacture Airbus aircraft and parts -- Germany, France, Spain and the UK.
It was not immediately clear if the Biden administration would also agree to temporarily suspend its tariffs on EU goods that the Trump administration targeted for retaliation in the dispute.
‘Bold’ Move
In November, the EU announced tariffs targeting $4 billion worth of Boeing planes and US products including spirits, nuts and tractors as part of a tit-for-tat escalation against the US For its part, the US imposed levies on $7.5 billion of EU products starting in 2019.
Though the European Commission had repeatedly asked the US for a six-month suspension of tariffs in order to negotiate a settlement, former US Trade Representative Robert Lighthizer declined to do so and further increased tariffs against EU goods in one of his final acts in office.
The UK said the latest move was a “bold, joint step” toward resolving one of the longest running issues at the WTO. The statement also said that the UK and US would focus on “addressing the challenges posed by new entrants to the civil aviation market from non-market economies, such as China”.
